3M Co. is set to lay off about 2,900 employees, about three per cent of its global workforce, as part of cost-cutting measures and restructuring efforts. These layoffs, which will be carried out across all business units and locations, will help the Company save up to $200 to 250 million a year.
These job cuts are also a step towards streamlining operations and ensuring better growth and productivity post the pandemic-induced disruptions. As part of its restructuring and cost-cutting, the Company will reduce investments in markets that are showing slow growth.
The Company will incur a cost of $250 million to $300 million in this restructuring. It had a workforce strength of approximately 96,000 at the end of last year. Since then, it has announced two rounds of job cuts, of 1,500 and 1,700 in January and August, respectively. However, those rounds mostly comprised reductions via attrition or removal of vacant posts.
Three weeks ago, the Company had revealed that 50 per cent of its businesses are experiencing a drastic slump in sales compared to last year. Sales fell 1.8 per cent in the first three quarters even though there was high demand for 3M’s N95 masks and cleaning products. That is mainly because its office supplies division — that manufactures post-it notes and Scotch tape — took a major hit with most people working from home. Its offerings for the healthcare and industrial business space also witnessed lower sales as people pushed their medical appointments lower down in their list of priorities. People will continue to delay their medical visits and appointments to avoid visiting hospitals amidst the threat of infection, unless it is an emergency. Therefore, there is little hope of demand recovering any time soon.
The Company has also been facing low demand for its electronics line of products and offerings associated with the aerospace industry.