3M to Cut Another 6K Jobs in Restructuring; Reports 1Q Fiscals - Modern Distribution Management

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3M to Cut Another 6K Jobs in Restructuring; Reports 1Q Fiscals

The 6,000 impacted positions are in addition to the downsizing of 2,500 global manufacturing roles that 3M announced in January.

PPE supplies and household adhesives manufacturer 3M plans to eliminate 6,000 positions amid financial restructuring, the company announced when reporting its first-quarter earnings on April 25.

“To strengthen 3M for the future, today 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,” 3M Chairman and CEO Mike Roman said in a news release.

3M’s restructuring actions are expected to affect all functions, businesses and geographies, the company said. The 6,000 impacted positions are in addition to the 2,500 global manufacturing roles that 3M cut in January.

The company expects annual pre-tax savings of $700 million to $900 million upon completion of its restructuring.

“These actions are expected to meaningfully reduce costs and drive long-term improvement in margins and cash flow while enabling a more efficient and effective structure for driving long-term growth,” the release said. “The company will continue to focus its commercial efforts in high-growth markets including automotive electrification, home improvement, personal safety, electronics and health care.”

The decision to restructure comes following a 1Q in which 3M posted sales of $8 billion, down 9% year-over-year, with an organic sales decline of 4.9%. Operating cash flow was $1.3 billion, up 26% year-over-year, while adjusted free cash flow was $0.9 billion, up 24% year-over-year. 3M’s 1Q sales were down sequentially from 4Q22, when the company had sales of $8.1 billion, down 6% year-over-year.

“In the first quarter we continued our relentless focus on serving customers and aggressively managed costs,” Roman said. “Market trends were as we expected, and we made changes to improve our operations and position us for success as supply chains improve.”

3M reaffirmed its full-year expectations for 2023, which forecast -6% to -2% total sales growth.

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