3M cuts 6,000 jobs as global demand drops
Manufacturer 3M plans to cut 6,000 jobs in its latest move to adjust to falling demand in several vital markets.
The reductions, part of its wider restructuring, are expected to narrow annual costs by as much as $900m 3M, based in Minnesota, said in posting firstquarter earnings on Tuesday.
These actions “will reduce costs at the corporate centre, further simplify and strengthen our supply chain structure, and streamline our go-to-market business models, which will improve margins and cash flow”, CEO Mike Roman said.
The stock rose 1.5% in early trading in New York. The share price of the manufacturing giant has fallen 12% so far in 2023, the worst performance in the Dow Jones Industrial Average.
The results highlight how the maker of Post-it notes, respirators and smartphone display materials is struggling to shake off weak demand for consumer goods, electronics and more of its roughly 60,000 products. Sales of virus-filtering respirators coming off pandemic fuelled highs and China’s choppy economic reopening have also weighed on 3M’s results.
The conglomerate ’ s operational struggles have added to investor fears over what could be billions of dollars in liabilities stemming from allegedly faulty earplugs supplied to US combat troops and contamination from “forever chemicals”, which 3M plans to stop producing by the end of 2025.
3M also announced management changes. The biggest is that of Michael Vale, a 30-year 3M veteran, being appointed to chief business and country officer, a new role on the company’s operating committee. He will report to Roman and oversee three of 3M’s four units.
Adjusted earnings last quarter were $1.97 a share compared with analyst estimates of $1.58. Organic sales fell 4.9%, less than the 6.9% drop Wall Street expected and the worst fall since the second quarter of 2020 when the pandemic ground much of the global economy to a halt.
Earlier in 2023 the company announced plans to cut 2,500 manufacturing jobs to respond to the soft demand environment, the latest in a series of restructuring moves announced since Roman was named CEO in 2018.
The company reiterated its annual forecast for organic sales to fall as much as 3% and adjusted earnings to be as much as $9 a share.
The restructuring actions announced in 2023 would result in pretax charges of as much as $900m, said the company. /