Major U.S. manufacturing firm 3M, the maker of Scotch tape among other popular office and industrial items, is cutting roughly 2,500 jobs worldwide in anticipation of economic struggles ahead, the company reported Tuesday.
Growth in organic sales — which discounts the impact of currency effects, acquisitions and divestitures — significantly undercut expectations at just 0.4% compared to the expected growth target between 1% to 3%, according to a 3M press release. The company noted that demand in “consumer-facing markets” had slumped in December, and that ongoing COVID-19 “disruptions” hurt the company in Chinese markets, prompting sales to slump 6% year-over-year to $8.1 billion. (RELATED: US Manufacturing Cratered In December At Fastest Rate Since Pandemic Began)
“We expect macroeconomic challenges to persist in 2023,” said chief executive officer Mike Roman in 3M’s press release. Cutting jobs was “a necessary decision to align with adjusted production volumes.”
The company posted a profit of $541 million, for $0.98 per share, compared to a profit of $1.34 billion the same time last year, for $2.31 per share, according to The Wall Street Journal. The company expects sales to slide an additional 2% to 6% in 2023.
The manufacturing industry struggled particularly hard in December, sliding at the fastest rate since the pandemic, according to the S&P Global Manufacturing Purchasing Managers’ Index (PMI). Manufacturers have seen declining demand for new orders, prompting hiring to slow to a crawl in December, as companies slowed productivity as they cleared their backlogs of orders.
3M did not immediately respond to a Daily Caller News Foundation request for comment.
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