3M has announced

As a result of decreased production, 3M has announced a large number of layoffs.

As the industrial sector braces for a probable recession and sagging demand for goods, 3M has announced substantial layoffs on Tuesday as part of yet another big reorganisation plan.

The industrial giant responsible for household names like Post-It Notes and Scotch Tape has announced it would be laying off 6,000 people throughout the world. These layoffs follow the 2,500 factory jobs that 3M already lost in January. The total number of employees has fluctuated over the previous few years, but 3M has planned many rounds of layoffs for 2019 and 2020.

After the layoffs are complete, the corporation estimates it will save up to $900 million annually before taxes. It was asserted by 3M that the reductions are “intended to make 3M stronger, leaner, and more focused” by streamlining the company’s supply chain and flattening the management structure.

For 3M, “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,” the company stated.

As it reported lower profitability and sales from the previous year, 3M also announced a number of management changes. The company’s quarterly sales dropped 9% to $8 billion, while its net income fell 25% to less than $1 billion.

Among other developing technologies, the corporation has stated that it would place an emphasis on climate technology, sustainable packaging, and automated industrial goods. In addition, 3M confirmed its prior 2023 forecast, which predicted sales declines of up to 6% for the year.

According to 3M, supply chain issues that plagued the industry for years after the epidemic have mostly been resolved. That implies the backlog of orders has been dispatched and the business, along with its competitors, may reduce headcount.

Meanwhile, sales of produced products have dropped in recent weeks. Businesses are bracing for a recession as consumers shift their purchasing priorities away from material goods and towards experiences.

Similarly, 3M’s main competitor, Dow, started the year by announcing thousands of job cuts.

In early trade, 3M (MMM) shares were up 0.2%.