3M said Thursday it will cut about 3% of its global workforce as it continues to restructure amid slumping demand for its products in the wake of the coronavirus pandemic.
The announcement of the layoffs, which are expected to eliminate about 2,900 jobs, comes three weeks after the maker of Post-Its and industrial materials reported that sales were down in about half its business lines from a year earlier.
3M embarked on a restructuring plan even before the pandemic, saying in January it would cut 1,900 jobs to improve growth and operational efficiency.
“The COVID-19 pandemic has advanced the pace of change and disrupted end markets around the world, increasing the need for companies to adapt faster,” CEO Mike Roman said Thursday. “At the same time, we are seeing significant opportunities from our new operating model which we launched at the start of the year.”
“As a result, we are taking further actions to streamline our operations, positioning us to deliver greater growth and productivity as global markets emerge from the pandemic.”
3M’s overall sales fell 1.8% through the first three quarters of this year despite booming demand for 3M’s N95 face masks and cleaning products.
The N95 masks are “just a sliver of the hundreds of products 3M makes for consumers, health-care providers, and industrial businesses,” The Wall Street Journal said. “Sales of 3M’s office supplies, industrial products, and other goods have slumped as people stayed home from work and postponed dental appointments and medical procedures.”
The company has said nonemergency medical procedures are unlikely to recover through next year as patients continue to stay away from hospitals and health-care facilities where patients are being treated for coronavirus.
“Homebound workers are consuming [fewer] office supplies, such as 3M’s Scotch tape and Post-it Notes,” the Journal noted. “Sales in 3M’s electronics lines and products tied to the aerospace industry also have declined.”
3M expects the latest job cuts and other changes in its business units will cost $250 million to $300 million but result in expense reductions of $200 million to $250 million annually.
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