Maplewood-based 3M is cutting 2,500 manufacturing jobs worldwide as demand for its products slows.
CEO Mike Roman called it a "necessary decision to align with adjusted production volumes" following a "slower-than-expected" end to the year and bleak outlook for 2023.
The company announced the cuts Tuesday morning but declined to share what locations or divisions the job losses would affect. This wave of layoffs represents about 2.6% of 3M's 95,000-person global workforce.
3M's consumer products have been hit especially hard as people pullback on discretionary spending.
The company expects disposable respirator sales to drop to pre-pandemic levels this year, a revenue decline of roughly $500 million.
Roman said several other factors are converging to push down sales — the company's exit from Russia; the slow rebound from China's COVID-19 lockdown; "aggressive" inventory reductions by retailers; strained hospital budgets and health care labor shortages; and weak demand from industrial customers.
A steep drop in demand for smartphones, TVs and tablets — and a continued shift from LCD to OLED screens — is also putting pressure on 3M sales. The company manufactures films and other critical components for consumer electronics.
Roman told analysts to expect "additional actions" in the coming year to streamline operations, including the health care spinoff.
"We are putting a focus on supply chain," Roman said, "and how we position ourselves closer to customers."
3M's stock price dropped 6% Tuesday and has plummeted 33% over the past year. The company's market capitalization has fallen to about $63.5 billion from nearly $100 billion in January 2022 — largely due to potential and actual financial liability from ongoing litigation and environmental issues.
"We are not satisfied with our performance and the expected start to this year," Chief Financial Officer Monish Patolawala told analysts on a conference call Tuesday morning. "The plan is to continue to aggressively manage production as a way to manage cash at the same time."
3M's profits slid in the fourth quarter to $541 million from $1.3 billion the same period a year ago. Adjusted for litigation and environmental issues, earnings per share of $2.28 still fell below analyst expectations.
For the full year, 3M reported a $5.7 billion profit, which is 2% lower than the previous year. Adjusted earnings per share were down 6% compared with 2021.
The company had $34.2 billion in revenue in 2022, a decline of 3% attributable in part to a strong dollar and divestitures.
For 2023, 3M expects sales to decline between 2% and 6% with adjusted earnings dropping 10%.
"We expect market and macroeconomic challenges to persist in 2023," Roman told analysts. "We are taking a deeper look at everything we do."