If your talking about hard ferrite (ceramic) magnets, cutting & machining is not an option.  The main method is grinding, which limits one to making only simple shapes.

Also, it's much easier to grind them when the are not magnetized.

Using a wet diamond blade by hand works just fine. For straight cuts that is. We've tried waterjet but have stayed with the saw.

Mike

We have used a slow speed diamond blade saw to cut fer rites. You are limited to straight cuts unless you have a goniometer head.  

http://www.southbaytech.com/shop/650.shtml

We have much larger versions of the diamond wire saw. With the proper  accessories you can cut most any shape.

http://www.gryphoncorp.com/omni2.html

Our business started by cutting ferrite. The only way is diamond blades with plenty of coolant.  We use automated as well as manual machines.  Waterjet is good but slow (the last time I checked).  It is very difficult to do intracate shapes, the only way is to use a particular sintering tool or use injection moulded ferrite.

The main reasons sintered ferrites are so difficult to shape are 1) they are very brittle and have a glass-like structure which makes for relatively poor mechanical strength, and 2) being ceramic materials they have very poor heat conductivity. That's why the water cooling is crucial. If you don't effectively remove the heat from grinding, you get significant differential thermal expansion which causes spalling and breakage. We use a commercial water-soluable coolant additive to improve lubrication during grinding.

Magnetic Instrumentation, Inc.
www.maginst.com