By Martin Baccardax for The Street
3M has said that it will eliminate around 2 900 jobs next year, while pulling back on investments in slower-growth markets, as part of an overall cost-cutting plant that will cost around $300-million.
3M said the updated restructuring plans, which were first launched in January, will affect all of its business divisions and geographies include a pre-tax charge of between $250 to $300 million, around $150 million of which will be taken in the current quarter. The moves will likely result in annual pre-tax savings of between $200 million to $250 million each year, 3M said, as it re-positions its global operations in the wake of the global coronavirus pandemic.
3M will detail the restructuring plans at an industry conference hosted by Credit Suisse later today, with CEO Mike Roman scheduled to speak at 8:10 Eastern time.
“The COVID-19 pandemic has advanced the pace of change and disrupted end markets around the world, increasing the need for companies to adapt faster,” Roman said.
“At the same time, we are seeing significant opportunities from our new operating model which we launched at the start of the year. As a result, we are taking further actions to streamline our operations, positioning us to deliver greater growth and productivity as global markets emerge from the pandemic.”
3M shares were marked 0.23% lower in early trading Thursday to change hands at $171.50 each to clip their six-month gain to around 6.5%, well shy of the 13.6% gain for the Dow Jones Industrial Average benchmark.
Last month, 3M posted modestly slower-than-expected October sale growth figures Friday, suggesting a potentially sluggish start to the fourth quarter for the industrial group.
3M said October sales rose 3% from last year to $2.9 billion as healthcare revenues rose 12%, offsetting a 4% decline in transportation and electronics. Safety and industrial sales rose 4% while consumer sales were 7% higher, 3M said, compared to respective gains of 6% and 3% in August.
3M had forecast “flat to low single digit” October sales growth during its third quarter earnings conference call with investors last month, but declined to provide profit or revenue guidance for the final three months of the year owning to broader economic and demand uncertainty linked to the coronavirus pandemic.
Source: Medical Process Outsourcing
3M continues to fight the global pandemic from every angle, and help ensure a safe supply of needed personal protective equipment, by expanding its region-specific resources to report and stop fraud around the world.
The company has launched an aggressive legal effort to stop profiteers who are attempting to take advantage of the demand for 3M products used by healthcare workers and first responders. Building on this work, 3M has established hotlines around the world to report suspected fraud and has created online resources to help spot price-gouging, identify authentic 3M respirators and ensure products are from 3M authorised distributors.
3M has investigated more than 7 700 fraud reports globally, filed 19 lawsuits, and has been granted nine temporary restraining orders and seven preliminary injunctions. More than 13,500 false or deceptive social media posts, over 11 500 fraudulent e-commerce offerings and at least 235 deceptive domain names have been removed. 3M has been awarded damages or has received settlement payments in seven cases, with all proceeds being donated to COVID-19 related charities.
3M has not, and will not, increase the prices of its respirators as a result of the pandemic. 3M is a global company with factories that produce respirators and other critical products needed to fight COVID-19 in the U.S., Europe, Latin America and Asia.
To combat increased counterfeiting and online fraud during the COVID-19 outbreak, 3M is working with law enforcement and customs agencies in every region of the world.
3M is also engaged with many major e-marketplace operators to detect and disrupt fraudulent and counterfeit respirator offers, including Amazon, Alibaba, Mercadolibre, Lazada, eBay, Flipkart, Shopee, Made-in-China and several others.
- Since the pandemic began, 3M has worked with customs and law enforcement agencies around the world to seize approximately 3.5 million counterfeit respirators, either as the products are moving through customs, or in targeted raids against suspected resellers and manufacturers of counterfeit products.
- 3M has engaged with law enforcement agencies to fight counterfeiting in more than 1,200 actions around the world.
In Latin America, 3M has worked with customs agencies in more than 15 cases to seize counterfeit respirators being imported into the region from other parts of the world, with several of the seized consignments containing more than 10,000 counterfeit respirators.
- In the United Arab Emirates, 3M has worked with police and the Dubai Department of Economic Development to seize over 600,000 counterfeit respirators.
- In Vietnam, a 3M investigation led to a raid and seizure of more than 150,000 counterfeit respirators. The Hanoi and Ho Chi Minh City Market Management Bureaus also seized the manufacturing equipment used to make the fake respirators.
- In Europe, 3M is fighting multiple cases of fraud involving bad actors using .nl, .uk and .pl domain names intended to deceive buyers with offers of nonexistent or fake 3M respirators. Other scams include using the names of 3M employees in fake invoices and certificates to claim a relationship to the company. 3M is taking legal action and is working with law enforcement through the European Union.
- In India, 3M is working with law enforcement agencies in multiple states to investigate and raid manufacturing operations producing counterfeit N95 respirators, and resellers offering counterfeit N95 respirators to the public, seizing fake products and holding bad actors responsible.
- In South Africa, 3M is investigating numerous cases of fraud and the sale of counterfeit respirators. In two recent cases, South African customs seized over 100 000 counterfeit 3M respirators.
These are just some examples of the many actions 3M is taking to stop and deter fraud to protect people around the world.
By Nathaniel Meyersohn for CNN
3M, which makes Post-It notes and Scotch tape, is cutting 2 000 jobs around the world.
The industrial manufacturer made the announcement Thursday as it reported weak sales during its most recent quarter and darkened its outlook for the year ahead.
Sales slid 5% to $7.9 billion last quarter compared to the same time period a year ago. Although sales ticked up in the United States, 3M’s largest region, sales dropped more than 9% in Europe, the Middle East and Africa. Those areas make up 3M’s second largest region. Sales in Asia also fell more than 7% compared to a year ago.
“The first quarter was a disappointing start to the year for 3M,” said Mike Roman, 3M chief executive officer, in a statement. “We continued to face slowing conditions in key end markets.”
In addition, 3M slashed its full-year guidance.
3M said the job cuts, which represent around 2% of its global workforce, will save the company up to $250 million annually. 3M will spread out the cuts across different business divisions and geographies “with emphasis on corporate structure and underperforming areas.”
The stock sank more than 10% in early trading Thursday, which drove down the Dow.
Liberty Media is still racing into trademark trouble over Formula One ‘s new logo.
In January, F1 business journalist Christian Sylt revealed that the new logo “bears a striking resemblance” to an existing ‘F’ logo already registered by the stationery company 3M for a range of compression tights.
‘Likelihood of confusion’
“We are looking into this matter further,” a 3M spokesman said then.
Sylt is now reporting that 3M has lodged opposition to F1’s logo trademark application, based on the “likelihood of confusion” with the tights brand.
Official opposition was lodged on 22 May, and Sylt said Europe’s intellectual property office normally takes up to four months to rule.
US-based company 3M has reported that stationery and office supplies declined year-on-year on an organic local-currency basis during the third quarter.