3M to cut 6,000 positions globally to improve cash flow
The company had about 92,000 employees, as of December 31, 2022
New York: 3M said on Tuesday it would cut about 6,000 positions globally as the US industrial conglomerate looks to focus on high-growth businesses, including automotive electrification and home improvement.
The move 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 sticky inflation makes buyers cut back on discretionary spending.
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The maker of ‘Scotch’ tape and ‘Post-it’ notes has been raising prices to offset a hit from surging commodity costs.
Along with this, recent cost-cut actions helped 3M beat profit and revenue estimates for the first quarter, sending its shares up 1.8 per cent at $106.9 in premarket trading.
“We announced actions that will reduce costs at the corporate center, further simplify and strengthen our supply chain structure, and streamline our go-to-market business models, which will improve margins and cash flow,” said 3M CEO Mike Roman.
The restructuring, which is expected to hit all functions, businesses, and geographies, is aimed at reducing layers of management and the size of the corporate center, the company said. Tuesday’s job cut is in addition to the reduction of 2,500 roles announced earlier this year.
The company had about 92,000 employees, as of December 31, 2022, according to its annual filing.
3M anticipates annual pre-tax savings of $700 million to $900 million upon completion of the cost-cut actions.
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.