3M Co. (MMM) - Get Report said Thursday 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.