Agilent said today it expects to eliminate about 300 jobs following its decision to exit its nuclear magnetic resonance (NMR) business, saying it had not met growth and profitability objectives.
Most of the jobs to be eliminated are in Santa Clara, CA, and in Yarnton, U.K., and will be cut “mostly within the next 12 months,” according to a company statement. Agilent said it will stop taking new NMR system orders immediately, but will continue to meet commitments from customers for orders in progress and for ongoing support contracts—as well as continue to provide service on all installed NMR systems.
Agilent expanded into NMR when it acquired Varian in 2010 for $1.5 billion.
“This action is a step in ensuring that our investments are placed on higher-value life sciences, applied markets, and diagnostics solutions that will continue to drive growth across the company,” Mike McMullen, Agilent’s CEO-elect as well as president and chief operating officer, said in the statement. “Today's announcement represents a difficult decision necessary to drive improved profitability.”
Agilent said the closing of the NMR business will be reflected in an approximately $72 million restructuring charge for the fourth quarter ending in January 2015—during which the company said it projects lower NMR-related revenues by about $12 million, as well as a $13 million reduction in revenues due to currency fluctuations.
The company also expects a $20 million to $30 million decline in revenues in the 2015 fiscal year, which will begin in February, due to the NMR business closure. However, the company also expects a positive impact of about $10 million in operating profit in FY 2015.
Agilent’s pullback from NMR comes about a year after the company restructured its Research Products division by exiting the OEM and Specialty Magnet business, followed later by an exit from the MRI business, in order to focus more resources on the core NMR portfolio: “Despite these adjustments, the NMR business has continued to fall short of growth and profitability objectives.”
Agilent last year refocused its operations on the life sciences, diagnostics, and applied chemical markets. The restructuring included spinning off its electronic measurement subsidiary into a separate company, Keysight Technologies, while retaining two business units—CAG, and a Life Sciences and Diagnostics Group combined from separate units focused on life-sci, diagnostics, and genomics.
Last month, Agilent named McMullen as the eventual successor to CEO William (Bill) Sullivan, who will retire next year after a 39-year career with the biopharma tools company and its predecessor business, the test and measurement business of Hewlett-Packard, spun off into Agilent in 1999.
