3M to cut 2,500 jobs as it girds for tougher economy
Jan 24, 2023 - 10:39 PM
NEW YORK — 3M announced 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 one percent, under the global average of 1.5 percent, 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 $541 million compared with $1.4 billion in the year-ago period, while revenues fell 6.2 percent to $8.1 billion.
The latest quarter included a drop of $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.
The company projected a drop of two percent to six percent in revenues this year, and lower profits per share compared with last year.
Shares of 3M tumbled 5.5 percent to $115.88 in early-afternoon trading.