American MNC, 3M to layoff 6000 employees Globally
3M (originally the Minnesota Mining and Manufacturing Company the American multinational, announced on Tuesday that it will be cutting around 6,000 jobs globally as part of a major restructuring exercise.
The company has announced another step towards restructuring, following the announcement in January 2023 of a cutback of 2,500 manufacturing jobs worldwide. The intended outcome of this restructuring exercise is to make 3M more robust, streamlined, and targeted.
The restructuring will involve reducing the size of the company’s corporate center, simplifying the supply chain, streamlining 3M’s geographic footprint, reducing layers of management, and aligning business go-to-market models to customers. In addition to the job cuts, the company expects annual pre-tax savings of $700 million to $900 million upon completion of the restructuring, which includes previous actions announced in January 2023.
3M’s Chairman and CEO, Mike Roman, said that the restructuring is being done to strengthen 3M for the future. By taking these measures, the company aims to lower expenses at its corporate headquarters, simplify and reinforce its supply chain framework, and optimize its go-to-market strategies. Roman added that this move will improve margins and cash flow.
3M has made some modifications to its top-level leadership team. Michael Vale has been named as the Group President and Chief Business and Country Officer, which is a new position within the company’s Corporate Operations Committee. Vale will directly report to the Chairman and CEO, Mike Roman. Meanwhile, Jeff Lavers will maintain his role as the Group President of the Health Care Business and will report to Mike Roman as well. For the previous nine months, Lavers has fulfilled dual roles as Group President overseeing the Consumer Business, as well as serving as interim Group President for the Health Care Business.
Excluding the effect of special items, 3M reported adjusted earnings per share of $1.97 for the first quarter. The company reported sales of $8 billion, down 9 percent YoY, with an organic sales decline of 4.9 percent YoY. The operating cash flow was $1.3 billion, up 26 percent YoY, while adjusted free cash flow was $0.9 billion, up 24 percent YoY. 3M returned $856 million to shareholders.
According to 3M, the process of restructuring is anticipated to result in a significant reduction in costs and a boost in long-term margins and cash flow. Additionally, this effort will facilitate the creation of a more streamlined and effective organizational structure to support sustainable growth over the long run.