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3M Made An Announcement This Tuesday That Will Cut About 2,500 Jobs In The Industry As The Company Reported Lower Profits And Provided A Weak Outlook For The Year 2023 Based On Weakened Demand.
This change will occur at a time when 3M, which operates in several sectors including healthcare, transportation, and electronics, has been facing a decline in sales related to the pandemic of face masks or “respirators” and “quick falls” in consumer-focused businesses.
3M has also been expecting very low growth in the U.S. in 2023, of about 1%, below the global average of about 1.5%, said CEO Mike Roman in a conference call with some analysts.
“We expect macroeconomic challenges to persist in 2023,” added the CEO in a press statement.
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“Based on what we see in our end markets, we will reduce approximately 2,500 global manufacturing roles – a necessary decision to align with adjusted production volumes,” he said.
A company source also stated that there are no additional details regarding where and which employment sectors will be affected. The net income in the fourth quarter was about US$ 541 million, compared to US$ 1.4 billion in the same period the previous year, while revenues fell by about 6.2% to US$ 8.1 billion.
This last quarter includes a significant drop of US$ 165 million in sales of face masks compared to the same period last year, as measures taken against Covid-19 have changed. The companies’ results were also significantly impacted by their exit from Russia.
Executives described mixed conditions in their markets, with automotive electrification remaining a strong source of demand, but consumer electronics declining further due to weak demand for TVs, tablets, and smartphones.
This company projects a decrease of two percent to six percent in revenue this year in 2023 and lower profits compared to last year’s performance. 3M’s shares fell by over 5.5% to US$ 115.88 early this afternoon.
Other companies are also facing mass layoffs, including John Deere, Frigorífico Big Boi, and Ford.
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