Multinational Conglomerate Company 3M on Tuesday announces that it would cut 2,500 manufacturing jobs due to a lower profit.
According to reports, US industrial conglomerate faces a demand slowdown in its unit that sells products including notebooks, air purifiers, and respirators.
The move comes as corporate America has seen a string of layoffs with companies trying to rein in costs amid fears of a potential economic downturn.
The diversified manufacturer said demand for its consumer-facing unit fell faster in December as weaker customer spending spilled into the holiday season, sending its shares down 4.7% to $116.79 in premarket trading.
3M expects adjusted sales growth to drop 6% to 2% this year due to declining disposable respirator sales and its exit from Russia.
“We expect macroeconomic challenges to persist in 2023,” Chief Executive 3M Mike Roman said.
A softer-than-expected consumer spending and a cutback from U.S. retailers amid inflationary pressures have eaten into the sales of 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 enabled us to improve inventory levels,” Roman added.
The company was able to offset higher raw material and logistics costs by raising prices which helped it beat profit in the previous quarter. Sales in the quarter fell 6% to $8.1 billion. Excluding items, the company reported a profit of $2.28 per share compared to $2.45 per share a year earlier.