3M announced significant layoffs Tuesday as part of yet another major restructuring plan as the manufacturing sector prepares for a possible recession and slumping demand for goods.
The manufacturing behemoth behind some consumer brands, including Post-It Notes and Scotch Tape, said it would lay off 6,000 staff around the world. Those cuts are in addition to the 2,500 manufacturing roles 3M eliminated in January. 3M also announced several mass layoffs in 2019 and 2020, but total headcount has been up and down over the past several years.
The company said it anticipates it will save up to $900 million a year before taxes after the layoffs are complete. 3M argued that the cuts are “intended to make 3M stronger, leaner and more focused” by simplifying its supply chain and reducing layers of management.
“These actions are expected to meaningfully reduce costs and drive long-term improvement in margins and cash flow while enabling a more efficient and effective structure for driving long-term growth,” 3M said in a statement.
3M also announced several management changes as it reported earnings and sales that fell from the previous year. Sales slumped 9% to $8 billion, while net income attributable to the company tumbled 25% to under $1 billion in the quarter.
The company said it would prioritize products that customers are increasingly demanding, including climate tech, sustainable packaging and automated industrial products, among other emerging technologies. 3M also reaffirmed its previous outlook for 2023, anticipating sales would fall by as much as 6% this year.
3M said the supply chain problems that doomed the sector for years in the wake of the pandemic have largely eased. That means backlogged orders have been shipped, and the company (and its peers) no longer need as much staff to handle the workload.
Meanwhile, demand for manufactured goods has fallen in recent months. Consumers have been spending less on stuff and more on experiences lately, and businesses are gearing up for an anticipated recession.
3M rival Dow also announced thousands of layoffs at the beginning of the year.
Shares of 3M (MMM) rose slightly in premarket trading.