Whatman axes quarter of staff and takes £27m charge
Tuesday 31 December 2002
Whatman, the troubled manufacturer of genetic testing equipment, is to axe nearly a quarter of its workforce as part of a group-wide rationalisation which will cost £27m in one-off charges.
A total of 235 jobs will go – 70 of them in the UK – reducing Whatman's worldwide workforce to about 800. At the same time the company intends to cut back the number of product lines it makes from 13,000 to between 4,000 and 5,000.
The biggest element of the £27m in one-off charges is a £13m provision against pending lawsuits. The company refused to give any details. Earlier this month it settled a legal dispute concerning its blood filtration business, HemaSure, by selling the division for £4m to Pall Corporation, a US company which was suing Whatman for alleged patent infringement.
The remaining £14m in charges will cover redundancy costs, site closures and asset write-downs.
Bob Thian, the former North West Water and Stationery Office chief executive who was drafted in as chairman in October, said the rationalisation would put the company on a firmer footing going forward.
He added that the appointment of a new chief executive to replace Tim Coombs, who was ousted at the start of this month, was likely to take until the second half of next year.
The restructuring announced yesterday will result in a cash outflow of up to £18.5m next year. Whatman said that for the current year, underlying trading remained in line with expectations.
Mr Thian said the rationalisation of Whatman's product line would not result in it withdrawing from any markets but would improve its profitability. "We have 13,000 product lines and half of them lose us money. It also makes ordering from us an intellectual challenge," he said.
The company intends to give further details of its strategic review when it reports its 2002 preliminary results in March. The sale of HemaSure, which was bought for £16m in 2001, will result in Whatman booking a one-off loss.
Shares in Whatman, which were worth 362p two years ago, fell by 5 per cent to close 4p lower at 84p.
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