3M is cutting 1,500 jobs in a global restructuring
Industrial conglomerate 3M is laying off 1,500 workers globally as the company looks to restructure.
3M announced the job cuts, which amount to a little more than 1.5% of its total employee count of 96,000, in its fourth-quarter earnings release Tuesday.
The company reported sales and earnings that missed forecasts and issued an underwhelming outlook for 2020. 3M, best known for making Scotch tape and Post-it notes, was among the worst-performing stocks in the Dow last year.
Shares of 3M tumbled nearly 6% on the layoff and earnings news. The company also said Tuesday that it took a pre-tax restructuring charge of $134 million in the fourth quarter because of the job cuts. But 3M is forecasting pre-tax savings of $40 to $50 million this year from the restructuring.
The company has been hit hardest by the lengthy trade spat between the United States and China. The company first said in October 2018 that trade tension with China would be a problem, and it’s only gotten worse since then.
Last April, 3M shares plunged 13% in one day — its worst fall in three decades — after the company said weakness in China and a strong US dollar were hurting sales and earnings. 3M lowered its outlook at the time and said it was cutting 2,000 jobs.
And even though the dollar has since cooled off and the US and China have signed a phase one trade deal, 3M is still struggling. The company’s sales fell in both Asia and Europe during the fourth quarter.
The deadly coronavirus outbreak poses another risk for 3M in China. CEO Michael Roman told analysts during a conference call Tuesday morning that sales are off to a “sluggish start” in China so far this year.
Roman added that “businesses are shutting down” due to the outbreak and extending their shutdown beyond Lunar New Year.
“We’re really watching day to day what that’s going to mean for our outlook for China.,” he said.
3M, which also makes protective masks, is trying to keep up with surging demand for those products in light of the outbreak.
“We’re seeing increased demand for our respiratory protection products, and we’re ramping up our production worldwide in China, around the world to meet that demand,” Roman said.
By Paul R. La Monica, CNN Business