3M Cuts Jobs After Pandemic Dents Sales
December 03 2020 - 01:29PM
Dow Jones News
By Bob Tita
3M Co. said it plans to cut 2,900 jobs to reflect slumping
demand for some of its products during the coronavirus
pandemic.
The St. Paul, Minn.-based industrial conglomerate has
experienced unprecedented demand for its N95 face masks, which
protect medical workers and others from the virus. But that
personal-protective gear is just a sliver of the hundreds of
products 3M makes for consumers, health-care providers and
industrial businesses. Sales of 3M's office supplies, industrial
products and other goods have slumped as people stayed home from
work and postponed dental appointments.
3M 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 less
office supplies, such as 3M's Scotch tape and Post-it Notes. Sales
in 3M's electronics lines and products tied to the aerospace
industry also have declined.
"The pandemic has advanced the pace of change and disrupted end
markets around the world," Chief Executive Mike Roman said in a
statement.
3M's shares rose 0.52% on Thursday to $172.80
3M said in October that sales were down in about half its
business lines from a year earlier. Overall, sales through the
first three quarters of this year were down 1.8%, compared with the
same period a year earlier despite booming demand for its N95 masks
and cleaning products.
3M reported that third-quarter sales of its N95 masks were $235
million higher than the same period last year. The company expects
to sell 2 billion of the masks by the end of 2020. The company also
reported improving demand for products used in home-improvement
projects, such as masking tape.
The company said it has trimmed costs by eliminating redundant
functions and increasing the use of data and digital services to
improve marketing and manufacturing operations. 3M said the changes
will position the company to compete in burgeoning markets for
e-commerce, personal safety, automotive electrification and home
improvement.
3M said the job cuts and other changes in its business units
will cost $250 million to $300 million, with $120 million to $150
million of that occurring in the current quarter. The company
expects to incur most of the remainder of the expenses in the
second half of next year. 3M predicts the changes will result in
expense reductions of $200 million to $250 million annually.
Write to Bob Tita at robert.tita@wsj.com
(END) Dow Jones Newswires
December 03, 2020 13:14 ET (18:14 GMT)
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