Hsu has submitted his resignation in order to spend more time with his family and pursue another opportunity, the company said. He will leave with immediate effect and will be replaced by Stephen Murdoch, who is currently chief operating officer.
The company now expects revenue for the year ending October 31 to fall between 6% and 9%, down from its previous guidance for declines of 2% to 4%.
Revenues were hit by problems stemming from its purchase of Hewlett Packard Enterprise software assets in September 2017.
At its interim results in January, the company said revenue would fall this year after disappointing sales from the HPE software assets.
The group said on Monday that its performance was also affected by issues with the implementation of a new IT system, which had an impact on the running of its sales team.
Cost cuts to offset lower revenues, says Micro Focus
Micro Focus said its cost cutting programme will mitigate the impact of lower revenues on its adjusted underlying earnings (EBITDA) margins, which is expected to be 37%. Analysts were expecting a 38% adjusted EBITDA margin.
It expects its net debt position at year-end to be broadly in line with market forecasts.
"We remain confident in Micro Focus' strategy whilst recognising that operational issues have led to a disappointing short term performance and outlook,” said executive chairman Kevin Loosemore.
"We believe that Micro Focus is well positioned to help our customers with the increasing pace of change across their Hybrid IT environments and to deliver customer centred innovation."
Shares plunged 54% to 860p in late morning trading.
UBS said the company's new guidance implies revenues of US$3.9bn to US$4.1bn and an EBITDA range of US$1.4bn-to US$1.5bn. That compares to consensus forecasts for revenues of US$4.2bn and EBITDA of US$1.6bn.
Numis downgrades to 'hold'
Numis downgraded the stock to 'hold' from 'buy', saying it does not think the company's cost cutting efforts will be enough to compensate for the challenges it faces with HPE and its sales execution.
"Furthermore, management indicates that the current period is seeing a worse performance, thus the six months to April 2018 is expected to show revenue down 9-12%," the broker said.
"This implies that licences could be down 20-30% in the April period."
Micro Focus underestimated HPE challenges, says analyst
Russ Mould, investment director at AJ Bell, said the cracks in Micro Focus were clearly visible at its half year results in January and today's warning confirms the problems resulting from its US$8.8bn acquisition of HPE assets have worsened.
“Large acquisitions are inherently risky as they come with integration challenges," he said.
"Micro Focus appears to have underestimated these challenges and is now suffering.”