With the severe slowdown especially in China demand, it looks like 3M will be having another round of job cuts. Any guess of the numbers to be announced in the next earning call - i.e. on top of the 2,500 + 6,000 announced this year??
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@wat+1oc8VawH
I agree with you, I do not believe there will be more cuts in 2023; they need to give the restructuring time to be executed.
One trick pony
Only trick Monish knows and Mike has abdicated.
With china weakness and share price slump, 2500 may not be enough…
2500?
Several months ago the employee target was 60,000 (worldwide). The new target is likely 50,000 (worldwide). This is not a solution; however, this is the mentality of the existing management, in order to protect their own jobs and golden parachutes.
July 25, 2023: 3M Company’s MMM second-quarter 2023 adjusted earnings (excluding $14.52 from non-recurring items) of $2.17 per share surpassed the Zacks Consensus Estimate of $1.65. The bottom line declined in double digits year over year. This includes a negative impact from pre-tax restructuring charges of $212 million.
Key Phrase: “The bottom line declined in double digits year over year.”
Key Questions:
- Can you cut your way to growth? Answer: No.
- Is this perpetual poor performance sustainable? Answer: No.
Inevitable Solution:
Filing Chapter 11 bankruptcy allows businesses to stay open and continue operating while reworking their financial obligations. Filers are able to put forth a reorganization plan, which can include downsizing and plans to reduce their expenses.
After several big rounds of restructures at the center, the job market here is very tight now. Good luck to people who will get impact later on. It’s getting tougher but 3M don’t care much about employees. They like to announce bad news around holidays.
Several posters already highlighted the dismal economic situation in China which will be reflected in the next earnings report. its definitely within the realm of possibility that they make another round of cuts this year.
My guess is further cuts could be announced around the end of October at the Q3 earnings call before the HC soft spin in November.
The real question goes back to how they deal with getting labor approvals for headcount reduction especially when facing strict labor laws in Europe dragging out the process and China who will not approve any reductions. There's only so much kowtowing to China for approvals before mother manufacturing needs to come up with a plan B to hit headcount cost reduction targets by 2024.
Maybe keep the headcount originally allocated for China and cut elsewhere? At the end of the day its all about KPI and cost savings. Reductions can be made elsewhere that were already impacted with minimal business consequence, right executive team?
Definitely more cuts coming. China alone is dragging on the revenues. Plus, the WFH environment is here to stay. Who needs office supplies? But the real reason for BIG cuts is to get the HC down to under 75,000 before the Healthcare spin happens. That new company will not want to pay for 1000s of severance packages. I see at least 5K this year announced in December, a week before Christmas so it gets buried in the Holiday shopping news.
They will definitely announce large cuts near 4q
China demand is shrinking fast, yet its headcount could not be cut in time. Disaster in the making.
They haven't even completed this round of layoffs there's still 1-2K reductions left to go. As far as I know EMEA is still in the midst of headcount reductions. China hasn't even started yet as their labor bureau will not approve any cuts (Can't really blame them since the economy in China is in trouble). MR had to make a personal trip to Shanghai back in July to try and get things rolling. Even after his visit reductions probably won't start till Q4 or even pushed back into Q1'24.
I doubt there will be any cuts announced in 2023. I agree with the previous post mentioning reductions to be completed by Dec 31st. They need to start the year on a clean slate with their targeted lower costs or its another hit in the first 2024 earnings report. Things should ramp up and complete in Q4.
The recent demand roll is shrinking fast. They would have no choice but to start job cuts, as these orders are not coming back soon.
Has EMEA even mostly/fully executed the prior cuts yet? They always take forever to cut, they have decent labor laws.
I haven't heard of a new cut yet through my channels, but everyone I talk to is worried about another one. After the stinker that was Q2 and what I'm hearing of Q3, trying another cut in US and China is a possibility (those countries can pull one off by year end).
Many APAC plants are having furloughs now. It won't be surprise when the job cuts kick in soon. My back of the envelop calculations will be another 3,000
I predict ‘some’ in Q3, but a ‘larger number’ in Q4. All heads roll of the books by December 31, keeping the cost to cut in this year’s numbers. They begin 2024 with fewer staff and no Q1 hits.
In addition to product demand, the litigation costs remain the anvil around the Company neck.
Yes maybe another 1-2k