3M to cut 2,500 jobs as consumer-focused companies face “rapid decline”

New York:

3M announced Tuesday that it will cut 2,500 manufacturing jobs as the industrial giant reported lower earnings and offered a mediocre 2023 outlook based on weaker demand.

The move comes as 3M, which operates in several industries including healthcare, transportation and electronics, is facing a decline in pandemic-related sales of face masks or “respirators” and “rapid declines” in consumer-facing companies.

The company also expects very low US growth in 2023 of about one percent, below the global average of 1.5 percent, CEO Mike Roman said on a conference call with analysts.

“We expect macroeconomic challenges to continue in 2023,” added Roman in a press release.

“Based on what we see in our end markets, we will be reducing approximately 2,500 global production rolls – a necessary decision to align with adjusted production volumes,” he said.

A spokesperson for the company said there are no additional details about where the jobs are located or in what industries.

Net profit in the fourth quarter was $541 million compared to $1.4 billion in the same period a year ago, while revenue fell 6.2 percent to $8.1 billion.

In the last quarter, there was a $165 million drop in face mask sales from the same period a year ago as Covid-19 measures shifted. The company’s results were also affected by the departure from Russia.

Executives described mixed conditions in their markets, with automotive electrification remaining a strong source of demand but consumer electronics declining sharply due to weak demand for televisions, tablets and smartphones.

The company expected a revenue decline of two to six percent this year and lower earnings per share compared to last year.

Shares of 3M plunged 5.5 percent to $115.88 in early afternoon trading.

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