3M Cuts Jobs After Pandemic Dents Sales

By Bob Tita 

3M Co. said it plans to cut 2,900 jobs to reflect slumping demand for some of its products during the coronavirus pandemic.

The St. Paul, Minn.-based industrial conglomerate has experienced unprecedented demand for its N95 face masks, which protect medical workers and others from the virus. But that personal-protective gear is just a sliver of the hundreds of products 3M makes for consumers, health-care providers and industrial businesses. Sales of 3M's office supplies, industrial products and other goods have slumped as people stayed home from work and postponed dental appointments.

3M has said nonemergency medical procedures are unlikely to recover through next year as patients continue to stay away from hospitals and health-care facilities where patients are being treated for coronavirus. Homebound workers are consuming less office supplies, such as 3M's Scotch tape and Post-it Notes. Sales in 3M's electronics lines and products tied to the aerospace industry also have declined.

"The pandemic has advanced the pace of change and disrupted end markets around the world," Chief Executive Mike Roman said in a statement.

3M's shares rose 0.52% on Thursday to $172.80

3M said in October that sales were down in about half its business lines from a year earlier. Overall, sales through the first three quarters of this year were down 1.8%, compared with the same period a year earlier despite booming demand for its N95 masks and cleaning products.

3M reported that third-quarter sales of its N95 masks were $235 million higher than the same period last year. The company expects to sell 2 billion of the masks by the end of 2020. The company also reported improving demand for products used in home-improvement projects, such as masking tape.

The company said it has trimmed costs by eliminating redundant functions and increasing the use of data and digital services to improve marketing and manufacturing operations. 3M said the changes will position the company to compete in burgeoning markets for e-commerce, personal safety, automotive electrification and home improvement.

3M said the job cuts and other changes in its business units will cost $250 million to $300 million, with $120 million to $150 million of that occurring in the current quarter. The company expects to incur most of the remainder of the expenses in the second half of next year. 3M predicts the changes will result in expense reductions of $200 million to $250 million annually.

Write to Bob Tita at [e-mail]

(END) Dow Jones Newswires

December 03, 2020 13:14 ET (18:14 GMT)

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