3M to cut 6,000 roles globally as weak consumer electronics demand pieces
April 25 (Reuters) – 3M Co ( MMM.N ) will cut about 6,000 jobs globally in a second round of layoffs this year, as the U.S. industrial conglomerate looks to rein in costs amid slowing demand for consumer electronics.
The diversified manufacturer said on Tuesday it will shift its focus to high-growth businesses including car electrification and home improvement, prioritizing new growth areas such as climate technology and next-generation consumer electronics.
The decision to cut jobs comes as an uncertain economy along with rising interest rates and stubbornly high inflation are forcing corporate America to slim down in recent months.
3M, which makes electronic screens for smartphones and tablets, has struggled with slowing demand for consumer electronics as people cut back on discretionary spending amid recession worries.
The company’s consumer electronics fell 35% in the first quarter, Chief Financial Officer Monish Patolawala said on a call with analysts.
“Compared to the first quarter of last year, consumers have changed their spending patterns to more non-discretionary items and retailers have aggressively reduced inventory levels,” Patolawala said.
The restructuring, which is expected to affect all functions, businesses and geographies, is aimed at reducing management layers and the size of the business center, the company said.
Earlier this year, the company had announced a reduction of 2,500 roles. With the second round of cuts, the company has now reduced its total global workforce by 10%.
3M expects to take total pretax restructuring charges of $700 million to $900 million, with about half of those in 2023 and the rest in 2024.
“End market dynamics appear mixed, but MMM continues to be cautious in managing costs/expenses that should over time support profitability as the company navigates a sluggish macro environment,” Citi analysts said in a note.
The St. Paul, Minnesota-based company reported adjusted earnings 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.
Report from Kannaki Deka in Bengaluru; Editing by Subhranshu Sahu
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