3M announces major layoffs amidst preparations for possible recession
On Tuesday, 3M, the manufacturing giant behind brands such as Post-It Notes and Scotch Tape, announced significant layoffs as part of a major restructuring plan. The company revealed that it would be letting go of 6,000 employees around the world, in addition to the 2,500 manufacturing roles it eliminated earlier this year.
The announcement comes as the manufacturing sector prepares for a possible recession and slumping demand for goods. 3M has also experienced several mass layoffs in 2019 and 2020, causing total headcount to fluctuate in recent years.
According to 3M, the layoffs will save the company up to $900 million annually before taxes. The company argues that the cuts are intended to simplify its supply chain and reduce layers of management, making the company “stronger, leaner, and more focused.”
In addition to the layoffs, 3M also announced several management changes as it reported earnings and sales that fell from the previous year. Sales decreased 9% to $8 billion, while net income attributable to the company dropped 25% to under $1 billion in the quarter.
Despite the challenging economic conditions, 3M remains committed to driving long-term growth. The company has pledged to prioritize products that customers are increasingly demanding, such as climate tech, sustainable packaging, and automated industrial products, among other emerging technologies. 3M has also reaffirmed its previous outlook for 2023, anticipating that sales will fall by as much as 6% this year.
While the supply chain problems that plagued the manufacturing sector for years have largely eased, demand for manufactured goods has fallen in recent months. Consumers have been spending less on physical products and more on experiences, while businesses are bracing for a potential recession.
3M’s rival Dow also announced thousands of layoffs at the beginning of the year. Despite the challenging environment, shares of 3M rose slightly in premarket trading.
3M, the manufacturing behemoth behind consumer brands such as Post-It Notes and Scotch Tape, has announced significant layoffs as part of a major restructuring plan amidst preparations for a possible recession and slumping demand for goods.
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