3M to cut 1,500 jobs worldwide
Updated: 5 p.m. | Posted: 7:28 a.m.
Maplewood-based 3M Co. announced that it will cut 1,500 jobs worldwide within the next few months.
A 3M spokesperson said about 500 of the job losses will occur in the U.S., although it isn't yet clear how many of those jobs will be in Minnesota. The rest of the job reductions will take place in Europe, the Middle East and Latin America, according to the spokesperson.
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The company says the restructuring plan will lead to cost savings of $130 million next year. A release from the company estimates a cost of about $100 million related to the structural changes during the fourth financial quarter.
3M reported third quarter net income fell to $1.29 billion from $1.3 billion the previous year. The company also reported a 5 percent decline in third-quarter sales.
With two-thirds of its revenue coming from foreign operations, the strong U.S. dollar is hurting 3M's sales and profits.
3M's revenue in foreign markets actually rose in local currencies. But once those revenues were exchanged into the very strong US dollar the sales dropped by more than 7 percent.
Edward Jones analyst Matt Arnold says 3M actually had a pretty solid quarter, given the strong dollar, a slowing worldwide economy and how many of 3M's industrial peers are posting weak numbers.
"We think that they can fare much better than a lot of companies out there," Arnold said. They are able to control their destiny a little bit. They are such great innovators."
Arnold said it's not surprising that 3M is looking to reduce costs, joining Caterpillar and other manufacturers in the effort.
"As companies adapt to the very low-growth world we are in, many of them have been able to identify opportunities to align their cost structure with where revenue trends are likely to wind up," Arnold said.
Shares of 3M rose up more than 4 percent today, even though the company trimmed its profit forecast for the year and announced the 1,500 job cuts. Hints of more economic stimulus in Europe lifted share prices across a broad range of industries.