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3M Company (MMM) will cut 6,000 jobs as part of a broader restructuring plan, the company announced on Tuesday.
The cuts, coupled with an earlier reduction of 2,500 workers announced in January, amount to roughly 9% of 3M's workforce as of Dec. 31. The move will help the company “adjust to slowing end-market demand,” 3M CFO Monish Patolawala said on the company’s earnings call.
The maker of everything from Scotch Tape to N-95 masks reaffirmed its gloomy outlook for fiscal-year 2023. 3M believes its organic sales growth will at best stay flat over the year but could slip as much as 3%.
“End-market trends played out as expected with ongoing weakness in consumer-facing markets,” 3M CEO & Chairman Michael Roman said on the company’s earnings call Tuesday. “We saw continued strength in certain industrial markets, including automotive, electrical markets and abrasives."
Despite 3M quarterly earnings per share falling more than 25% from the same period, Tuesday’s results were better than analysts had feared. 3M posted quarterly revenue of $8.03 billion, above the Street’s estimates for $7.47 billion. Adjusted earnings per share for the first quarter were $1.97 versus analyst estimates of $1.58.
3M shares rose nearly 2% on the results before turning negative later in the day. The stock was down 0.53% Tuesday afternoon.
3M’s manufacturing business reaches a large breadth of industries from business-to-business sales to everyday Americans buying tape or a smartphone screen protector at a local store.
Tuesday's results from 3M underscored the slowdown companies across various sectors have been referencing. While the biggest names laying off employees last year were in tech and media, the trend is now broadening to other industries as a broader swath of companies grapple with rising expenses and slowing demand.
3M’s cautious outlook on the consumer coincides with UPS (UPS) CEO Carol Tomé, UPS chief executive officer saying Tuesday that “disposable income is shifting away from goods to services." UPS said its results reflected recent monthly declines in retail sales.
In electronics, adjusted organic sales declined in the mid-30% range, reflecting weak consumer demand. Last week, AT&T (T) CEO John Stankey said consumers are extending their use of electronics longer than normal and “making the kind of decisions people make when money is a little bit tighter.”
“The softness we experienced in Q1 in consumer electronics and consumer retail is expected to continue into Q2,” Patolawala said on 3M’s earnings call.