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US manufacturer 3M says to cut 2,000 jobs on slowing demand
NEW YORK, April 26, 2019 (AFP) – US industrial products manufacturer 3M
announced Thursday it will cut 2,000 jobs worldwide, citing weakness in key
markets that led to a drop in first-quarter sales.
3M, which makes a wide variety of industrial goods and tools as well as
everyday items such as the ubiquitous stick-and-remove Post-It notes, also
slashed its full-year profit forecast.
Total sales fell five percent to $7.9 billion and included a 7.4 percent
drop in Asia Pacific and a 9.4 percent decline in Europe, the Middle East and
Africa.
Most of 3M’s business segments lost sales in the first quarter, with the
steepest declines in industrials, products that include structural adhesives,
insulation components, electronics and energy.
Job cuts, which will result in annual savings of $225-250 million, will
span all business groups, with an emphasis on “underperforming areas,” the
company said. 3M had 93,516 employees at the end of 2018.
“The first quarter was a disappointing start to the year for 3M,” said
Chief Executive Mike Roman.
“We continued to face slowing conditions in key end markets which impacted
both organic growth and margins, and our operational execution also fell
short of the expectations we have for ourselves.”
Despite the weak sales, net income jumped 48 percent to $891 million
because of a $897 million legal charge that dented profits in the comparable
period of the prior year.
But 3M disclosed $548 million in new legal costs in the first quarter to
build reserves for environmental litigation related to chemical waste
disposal and for health care claims for coal miners, who have blamed the
company for respiratory problems.
3M, a component of the Dow Jones Industrial Average, plunged more than 10
percent just after trading opened in New York, to $195.87.
BSS/AFP/HR/1025