3M cuts 6,000 jobs, warns of sector-wide slowdown


3M Company (MMM) will cut 6,000 jobs as part of a broader restructuring plan, the company said Tuesday.

These reductions, combined with the 2,500 employee cuts announced in January, represent approximately 9% of 3M’s workforce as of December 31. The move will help the company “respond to slowing end-market demand,” said Monish Patrawala, his CFO of 3M. on the company’s earnings call.

The maker of everything from scotch tape to N-95 masks has reaffirmed its pessimistic outlook for fiscal 2023.

3M CEO and Chairman Michael Roman said on Tuesday’s earnings call that “end-market trends have progressed in line with expectations as consumer markets continue to be weak. ‘ said. “We continue to do well in certain industrial markets such as automotive, electrical markets and abrasives.”

3M’s earnings per share were down more than 25% from the quarter, but Tuesday’s results were better than analysts feared. 3M’s quarterly earnings for him were $8.03 billion, beating Street’s estimate of his $7.47 billion. Adjusted earnings per share for the first quarter were $1.97, compared with analyst estimates of $1.58.

3M shares rose nearly 2% on the results before turning negative later in the day. The stock fell 0.53% on Tuesday afternoon.

3M’s manufacturing operations span a wide range of industries, from business-to-business sales to everyday Americans buying tape and smartphone screen protectors at their local stores.

Tuesday’s results from 3M highlighted slowdown in various companies referenced by the sector. Tech and media were the biggest companies to lay off workers last year, but the trend is now spreading to other industries as more companies grapple with rising costs and slowing demand.

3M’s cautious outlook for consumers is in line with UPS (UPS) CEO Carol Tomé’s statement on Tuesday that “disposable income is shifting from goods to services.” ing. Recent monthly decline in retail sales.

Electronics decreased adjusted organic sales in the mid-thirties, It reflects weak consumer demand. Last week, AT&T (T) CEO John Stankey said that consumers are extending their use of electronic devices longer than usual, and that “the kind of things people do when money is a little tight. I am making a decision,” he said.

Patrawala said on 3M’s earnings call:

3M’s sales growth over the past few years has been attributed in part to the role the company has played in fighting the COVID-19 pandemic, with products such as disposable respirators and N-95 masks. But some businesses are also set back. Decreased ventilator sales at 3M had a -$0.21 impact on earnings per share.

But the company remains bullish in other areas of healthcare. The volume of elective medical procedures in the first quarter was about 90% of the pre-Covid volume, according to the company. The amount would probably have been higher had it not been for the continued shortage of nurses and tight hospital budgets.

“We continue to expect the volume of procedures to improve as progress is made this year,” Patrawala said by phone.

Josh is a reporter at Yahoo Finance.

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