On Tuesday, 3M confirmed that it will cut down 6,000 positions globally due to weak consumer electronic demands. This move is expected to affect 4% of the company’s total workforce. According to the company’s annual filing in December 2022, it has over 92,000 employees globally. 3M also recorded a pre-tax saving of $700-900 million upon the completion of the cost-cut actions.
The decision of job-cut comes due to an uncertain economy and high inflation that force the company to focus on improving cash flow. During the pandemic, the company recorded fewer product demands due to which the supply chain disrupted. Now, 3M’s main focus is to streamline the business operations.
Mike Roman, CEO Of 3M said, “We announced actions that will reduce costs at the corporate center, further simplify and strengthen our supply chain structure, and streamline our go-to-market business models, which will improve margins and cash flow.”
This restructuring action due to weak consumer electronic demands is expected to affect business functions and future plans. However, the company also laid off more than 2500 employees earlier this year. The company is yet to disclose the positions that would be affected by this employment cut.
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In the statement, 3M claimed that, “This plan would make it a stronger, more streamlined company that emphasizes innovation, growth, and sustainability. The company expects pre-tax savings of $400-$450 million by the end of 2025”
It is also clarified from the company’s officials that it will provide affected employees a severance compensation and other form of support. There is no doubt that job cuts will be difficult for affected employees but also necessary for the company’s future plan.
