Agilent cuts 450 employees, 200 temps
The Hewlett-Packard spinoff is slicing its payroll as part of restructuring. The layoffs specifically target the company's Healthcare Solutions Group.
By one measure, the layoffs appear insignificant when viewed against the test and measurement company's workforce of 43,000. But the layoffs will cut more than 10 percent of Agilent's Healthcare Solutions Group.
The division has been struggling and contributed to Agilent's July profit warning. The unit posted about a $30 million loss in the second quarter and is expected to take a similar hit in the third quarter.
In conjunction with the maneuver, Agilent plans to speed up the streamlining of its manufacturing facilities in Andover, Mass., Boeblingen, Germany, and Qingdao, China. In June, the company said it would move final assembly manufacturing operations from Andover to a Singapore facility. Similar operations in Boeblingen and Qingdao will be moved to Singapore.
"We're taking these actions to return our Healthcare Solutions business to profitability as quickly as possible," Agilent CEO Ned Barnholt said. "The business' current financial performance is clearly unacceptable, and we don't intend to wait for market conditions to improve before implementing our plans. We're firmly committed to strengthening this business and are confident that today's actions will help get HSG back on track."
Agilent expects to save $80 million a year, starting in fiscal 2001, from the layoffs and other changes. The company plans to complete the reductions in its U.S. workforce by Oct. 31 and take a $25 million charge in the fourth quarter for layoffs here and abroad.
In July, Agilent warned that it did not expect to meet third-quarter expectations of 35 cents a share and instead expected between 18 cents to 22 cents a share. The company plans to announce third-quarter results on Thursday. The company is expected to announce that shortages of parts greatly contributed to its problems.
Hewlett-Packard spun off Agilent from its test and measurement division last year. The company designs and manufactures testing, measurement and monitoring instruments and systems, as well as semiconductor and optical components.
Agilent started independent operations and trading in November and has since announced two quarters of earnings.
In the second quarter, Agilent's net earnings rose 6 percent to $166 million, including a one-time gain of about $16 million. As part of HP, the company had net revenue of $8.3 million last year.