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Jan 7, 2009

Agilent warns of possible 10% job cut

Agilent Technologies, the largest high-tech employer in Sonoma County, warned Tuesday it could cut its work force 10 percent if sales continue to slump in the global economic downturn

"Nobody knows exactly where this downturn will go," said Ron Nersesian, vice president and general manager of Agilent's Santa Rosa-based Wireless Business Unit.

Agilent revenue could be down as much as 10 percent this year as demand slows for its test and measurement products, Nersesian told Needham & Co.'s Growth Stock Conference in New York.

Agilent already has taken steps to reduce costs, including cutting employee salaries by 10 percent. But a 10 percent work force reduction still is an option, he said.

"We will do that if we have to, but our first priority is to stay focused on the customer, deliver the savings and win in the marketplace," Nersesian said.

The Santa Clara-based company, which has 20,000 employees worldwide, has about 1,350 workers in Santa Rosa.

Agilent has no immediate plans for across-the-board work force reductions, cautioned Jeff Weber, spokesman for the company's Santa Rosa unit.

"Such actions are always an option for companies facing serious business downturns," Weber said.

A growing number of employers are cutting costs as troubles in the housing and finance sectors spread to other areas of the economy. Sonoma County unemployment hit 6.5 percent in November, its highest mark in almost 14 years. About 17,500 Sonoma County residents were out of work in November, a 47 percent increase from November 2007.

Starting Jan. 1, Agilent cut employee pay 10 percent, "from the CEO on down," Nersesian told investors Tuesday. The move avoided across-the-board layoffs and is expected to save about $100 million this year, Nersesian said.

"It's actually a good thing from the employees' perspective," he said. "All of our people are working full time trying to get us ahead."

The company has taken other steps to save costs, Nersesian said, including a freeze on hiring, outsourcing more manufacturing, eliminating most temporary jobs and focusing on high-growth product lines.

Agilent employees were furloughed for two weeks at the end of December. While some employees took unpaid time off, most received paychecks during this period by tapping into vacation time, Weber said.

Agilent also has linked a larger portion of employee pay to its financial results, saving the company money when profits are down, he said.

All of those steps will save an additional $300 million, Nersesian said. Agilent's current cost-saving measures will cover a drop in revenue up to 15 percent, he said.

Agilent's Santa Rosa unit is part of the company's electronic measurement business, which makes test technology for most of the world's wireless devices. Agilent expects the measurement business will be down 15 percent in 2009 as consumers buy fewer electronic gadgets.

The wireless unit is Agilent's largest business segment, with about $2 billion in annual sales.

The company started seeing a drop in orders in the second half of 2008, Nersesian said. Still, Agilent saw a 26 percent increase in operating profit on a 7 percent jump in sales for the year, he said.

Agilent's life sciences and chemical analysis businesses are expected to remain strong in 2009, he said.

Agilent shares rose to $18.13 at the close of the New York Stock Exchange on Tuesday, up almost 8 percent from Monday's close.

Source : PressDemorcrat
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