This news comes as the processor and semiconductor IP developer reports an EBIT loss for the financial year to 30 April 2016.
Imagination has also decide to sell Pure, its consumer electronics business. It will also reduce total operating costs of its on-going businesses by £15m in the next financial year, ending April 2017.
Andrew Heath will act as interim chief executive and the search for a new chief executive starts immediately.
Hossein, who joined the company, then called Videologic, in 1992, has played an important role in changing the direction of the business to be a processor IP licensing business and changing the name to Imagination Technologies in 1999.
“His many notable achievements include the development of graphics and video processors for smartphones, gaming devices, TVs and the automotive industry and the introduction of digital radios as a mainstream product,” said Bert Nordberg, Chairman.
According to the company, since its half year results in December 2015 “market conditions have not improved and the slow-down in the overall semiconductor sector has continued.”
“Royalty returns from some key customers have fallen short of previous expectations for the last calendar quarter of 2015 with lower forecasts for the first calendar quarter of 2016,” said Imagination.
Licences and related revenues already secured this year amount to £24m, but the company said that the “pace of deal closure is falling short of prior expectations”.
The plan is to re-invest £2m in its key graphics processor technology, Power VR.
Imagination will also initiate a full operational review, including all R&D expenditure.
Sir Hossein Yassaie, commented:
“We have built Imagination from very small beginnings into the leading provider of graphics processors as well as general purpose micro-processors and connectivity solutions. It’s now time for someone else to lead this great company.”