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Optibase (Nasdaq:OBAS) is holding an assembly of workers tomorrow ahead of a wave of layoffs.

The company confirmed that it is dismissing 40 out of its 200 employees. But it firmly denies reports that it may shut down certain production lines.

CFO and acting CEO Zvi Halperin told today that the company has to cut costs, including by trimming staff. The layoffs will touch on all divisions, including the company's United States outfit, Halperin said.

He denied press reports that Optibase may suspend or eliminate certain production lines. Optibase is not about to turn into a shell company, Halperin insisted. It still devotes resources to product development and support, including of its line of Viewgraphics and MediaGateway.

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Optibase develops software and hardware to deliver media and data files over communications networks, including Internet. The decision was reportedly made by the company's new management team, which convened last week for the first time.

The shakeup follows the company's takeover by a new team of investors led by Tom Wyler and Arthur Mayer-Sommer. In June Wyler and Mayer-Sommer announced that they had acquired 24% of Optibase's equity. A month later, both joined the firm's expanded board of directors.

Ran Eisenberg, who had served as the CEO of Optibase for the past seven years, announced his resignation two weeks ago. Yair Seroussi and Eli Ayalon also stepped down as board members last week.

Robert DeFeo, the president of Optibase's wholly-owned U.S. subsidiary, Optibase Inc., also resigned during the management shuffle.

In the wake of these resignations, Zvi Halperin, who had served previously as the company's chief financial officer, was appointed interim CEO, while Wyler has assumed the role of chairman of the board.