3M to cut 2,500 jobs as it girds for tougher economy

3M ANNOUNCED on Tuesday it will cut 2,500 manufacturing jobs as the industrial giant reported lower profits and offered a lackluster 2023 outlook based on weakening demand.

The move comes as 3M, which operates in several sectors including health care, transportation and electronics, contends with a drop in pandemic-related sales of face masks or “respirators” and “rapid declines” in consumer-facing businesses.

The company also expects very low US growth in 2023 of about 1.0 per cent, under the global average of 1.5 per cent, chief executive Mike Roman said on a conference call with analysts.

“We expect macroeconomic challenges to persist in 2023,” Roman added in an earnings press release.

“Based on what we see in our end markets, we will reduce approximately 2,500 global manufacturing roles – a necessary decision to align with adjusted production volumes,” he said.

A company spokesperson said there were no additional details on where the jobs are located, or in which sectors.

Net profit in the fourth quarter was US$541 million compared with US$1.4 billion in the year-ago period, while revenues fell 6.2 per cent to US$8.1 billion.

The latest quarter included a drop of US$165 million in face mask sales from the same period a year ago, as the measures taken against Covid-19 shifted. The company’s results were also dented by its exit from Russia.

Executives described mixed conditions across their markets, with automotive electrification remaining a strong source of demand, but consumer electronics falling hard due to weak demand for televisions, tablets and smartphones.

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The company projected a drop of 2.0 per cent to 6.0 per cent in revenues this year, and lower profits per share compared with last year.

Shares of 3M tumbled 5.5 per cent to US$115.88 in early-afternoon trading. AFP