3M to cut 6,000 roles globally as weak consumer electronics demand bites
3M Co will cut about 6,000 positions globally in a second round of lay-offs this year, as the U.S. industrial conglomerate looks to rein in costs amid waning demand for consumer electronics.
The diversified manufacturer said on Tuesday it will shift its focus to high-growth businesses, including automotive electrification and home improvement, and prioritize emerging growth areas such as climate technology and next-generation consumer electronics.
The job-cut decision comes as an uncertain economy along with rising interest rates and stubbornly high inflation forces corporate America to get leaner in recent months.
3M, which makes electronic displays for smartphones and tablets, has been struggling with waning demand for consumer electronics as people are cutting back on discretionary spending amid recession worries.
The company’s consumer electronic business fell 35 percent in the first quarter, chief financial officer Monish Patolawala said on a call with analysts.
“Relative to the first quarter of last year, consumers have shifted their spending patterns to more non-discretionary items and retailers have aggressively reduced their inventory levels,” Patolawala said.
The restructuring, which is expected to hit all functions, businesses, and geographies, is aimed at reducing management layers and the corporate center’s size, the company said.
Earlier this year, the company had announced announced a reduction of 2,500 roles. With the second round of job cuts, the company has now reduced its total global workforce by 10 percent.
3M expects to take total pretax restructuring charges of $700 million to $900 million, with about half of those to occur in 2023 and the balance in 2024.
“End-market dynamics appear mixed, but MMM continues to be prudent in managing cost/spending that should, over time, support profitability as the company navigates a slow macro environment,” Citi analysts said in a note.
The St. Paul, Minnesota-based company reported an adjusted profit of $1.97 per share for the quarter ended March 31, above analysts’ expectations of $1.58 per share, according to Refinitiv. Revenue of $8.03 billion also topped estimates of $7.49 billion.
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