3M to cut 2,500 jobs as demand falters and profits fall

(Reuters) – 3M Co said on Tuesday it would cut 2,500 manufacturing jobs after reporting a drop in profits, as the U.S. industrial conglomerate faces slowing demand at its unit that sells products such as laptops, air purifiers and respirators.

The move comes as corporate America has seen a series of layoffs with companies trying to control costs amid fears of a potential economic downturn.

The diversified maker said demand for its consumer-facing unit fell faster in December as lower customer spending rippled through the holiday season, sending its shares tumbling 4.7% to 116.79 $ in pre-market trading.

3M expects adjusted sales growth to fall from 6% to 2% this year due to lower disposable ventilator sales and its exit from Russia.

“We expect macroeconomic challenges to persist into 2023,” Chief Executive Mike Roman said.

Weaker-than-expected consumer spending and a reduction in U.S. retailers amid inflationary pressures have eaten away at sales at 3M’s consumer unit, which generated about $5.30 billion in revenue in 2022.

“As demand weakened, we adjusted manufacturing output and controlled costs, which allowed us to improve inventory levels,” Roman added.

The company was able to offset rising raw material and logistics costs by raising prices, helping it beat its profits in the prior quarter.

Sales for the quarter fell 6% to $8.1 billion. Excluding items, the company reported earnings of $2.28 per share, compared with $2.45 per share a year earlier.

(Reporting by Aishwarya Nair in BengaluruEditing by Vinay Dwivedi)

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