BENGALURU: 3M Co said on Tuesday it would cut 2,500 manufacturing jobs and forecast a gloomy first-quarter as the US industrial conglomerate struggles with slowing demand for consumer and electronic items.
The downbeat outlook and quarterly results pile more pain on the company, at a time it faces separate lawsuits related to defective earplugs and its use of “forever chemicals”, which 3M said in December it plans to discontinue.
3M shares fell 4.7% as it joined other industrial majors General Electric Co and Raytheon Technologies Corp in flagging a hit from inflation in 2023.
“MMM to some extent had recently lowered investor/Street expectation but weak 4Q22 results and softer 2023 guidance (weak demand environment) should weigh on the stock in the near-term,” Citi analysts wrote in a note.
Demand slowdown has extended into the current quarter as consumers cut discretionary spending and rigorous industrial de-stocking, especially in Asia, 3M said.
“Three weeks into January, we are seeing continued slowing in organic sales volume as we start the year,” Chief Financial Officer Monish Patolawala said.
The company, which has been battling with higher labor and energy costs, said it would continue to adjust its manufacturing levels and maintain spending discipline until volumes bounce back.
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