Thread regarding 3M layoffs

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3M to Cut Thousands More Jobs as Sales Struggle
Restructuring to focus on faster-growing businesses including industrial automation and climate technology

3M , which makes tape and other home-use products, said its overall sales declined in the latest quarter.
PHOTO: MARIO ANZUONI/REUTERS
By John Keilman and Dia Gill
Updated April 25, 2023 12:49 pm ET
3M Co. said it is cutting thousands more jobs as part of a restructuring meant to focus on fast-growing parts of its business while sales of established products struggle.
The Minnesota-based maker of Scotch tape and Post-it Notes said Tuesday it will eliminate 6,000 positions, cutting employees across all parts of the company to streamline corporate operations, simplify its supply chain and reduce management layers.
Those job cuts are in addition to the 2,500 manufacturing positions 3M said it would eliminate in January. Chief Executive Mike Roman said Tuesday that together, the moves will reduce the company’s global workforce by about 10% and save between $700 million and $900 million in annual pretax costs upon completion.
“We’re confident that these are the right actions about positioning us for growth and profitability as we go forward,” Mr. Roman told analysts in a conference call.
3M announced the restructuring plan as it released first-quarter earnings results that topped analysts’ expectations. The company reported first quarter net income of $976 million, or $1.76 a share, compared with $1.3 billion, or $2.26 a share, in the same period a year earlier.
Analysts had expected earnings of $1.58 a share, according to FactSet.
The company reported $8.03 billion in sales, down from $8.83 billion a year earlier. Analysts had expected $7.49 billion.
3M has struggled with soft demand for its products, and that continued into the first quarter. Adjusted net sales declined across all four of the company’s business segments—safety and industrial, transportation and electronics, healthcare, and consumer—compared with the same period in 2022.
Chief Financial Officer Monish Patolawala
attributed a 35% decline in 3M’s electronics-segment sales to reduced demand for smartphones, tablets and televisions.
Mr. Roman said the cost-cutting will allow 3M to give priority to growth areas such as climate technology, sustainable packaging, industrial automation, semiconductors and next-generation consumer electronics.
The company’s restructuring comes after some investors raised concerns over the executive leadership, citing continued declines in 3M’s revenue and earnings under Mr. Roman. The company has said it welcomes investors’ feedback.
3M’s stock gained 0.3% in midday trading. The shares hit a 10-year low before bouncing back in recent weeks and are down around 30% over the past 12 months, compared with a 4.5% drop in the S&P 500 and a 1% decline in the Dow Jones Industrial Average.
3M’s shares have been weighed down by litigation. About 230,000 veterans have filed complaints in federal court alleging earplugs made by 3M subsidiary Aearo Technologies LLC failed to protect them from service-related hearing loss. 3M is contesting the lawsuits.
The company is also defending against allegations that PFAS, so-called forever chemicals, have contaminated soil and drinking water. 3M’s liability from PFAS litigation could reach tens of billions of dollars by the end of the decade, according to Capstone LLC, a Washington-based firm that advises investors and companies on regulatory issues.
3M is phasing out production of PFAS, though Mr. Patolawala said at an investor conference earlier this year that the company believes the products are safe to make and use. He also said the company did nothing wrong with its earplug business.
3M is moving ahead with a spinoff of its healthcare business, which accounts for about a quarter of the company’s revenue. It was the only segment to generate organic sales growth year over year during the most recent quarter, and Mr. Patolawala said he expected demand for its products to increase as elective hospital procedures return to normal.
Write to John Keilman at john.keilman@wsj.com and Dia Gill at dia.gill@wsj.com

Corrections & Amplifications
Analysts expected earnings of $1.58 a share for 3M in the first quarter, according to FactSet. A previous version of this article incorrectly said $1.57 a share. (Corrected on April 25.)