Test and measurement equipment maker
Agilent Technologies Inc. (A.N) on Monday said it would slash
650 jobs and restructure operations at its troubled health care
unit to try to return it to profitability.
Agilent's Healthcare Solutions Group, which has been the
source of many of the company's problems recently, will reduce
its regular workforce by 9 percent, or 450 workers, in addition
to laying off 200 contract employees, the company said. The
workforce reductions are to be completed by Oct. 31.
"The business's current financial performance is clearly
unacceptable, and we don't intend to wait for market conditions
to improve before implementing our plans,'' Agilent Chief
Executive Ned Barnholt said in a statement. "We're firmly
committed to strengthening this business and are confident that
today's actions will help get HSG (Healthcare Solutions Group)
back on track.''
While the restructuring is expected to result in annual
savings of more than $80 million starting in fiscal 2001, the
company said it expects to incur a one-time charge of about $25
million in the fourth quarter ending October 31 to complete the
In July, the company had predicted that the unit would post
losses of at least $30 million for the third quarter, a company
spokesman noted. Now the company is looking at making the unit
profitable as soon as possible -- probably by sometime next
year, he said.
"We're trying for the fourth quarter, but that would be a
stretch,'' company spokesman Steve Beitler said.
The unit will also accelerate a program begun in June to
improve efficiency by transferring final assembly manufacturing
operations from its Massachusetts facility to its production
facility in Singapore. It will now also transfer some of its
operations from its facilities in China and Germany to the
In the meantime, the company will continue to invest in new
products and technologies that cater to healthcare outside the
hospital, such as equipment used in clinics and homes, Beitler
The company's shares responded positively to the news,
rising 2-1/16, or more than 5 percent, to 42-1/2 in morning
trading on the New York Stock Exchange.
The healthcare unit was one of the key factors Agilent
blamed when it warned in late July that its third-quarter
earnings would fall short of Wall Street forecasts. Agilent had
said it expected to report earnings per share for the quarter of
18 cents to 22 cents, far short of the Wall Street consensus
estimate of 35 cents a share.
Agilent, which was spun off by Hewlett-Packard Co. (HWP.N)
earlier this year, is scheduled to report its third-quarter