3M To Cut 6,000 Jobs Globally; 600 Employees In Minnesota Could Be Affected

Manufacturing giant 3M announced Tuesday it was laying off 6,000 employees globally. The layoffs will not spare U.S. workers as hundreds of jobs at its Maplewood, Minnesota, headquarters will reportedly be affected.

"3M is taking restructuring actions that are intended to make 3M stronger, leaner and more focused," the company said in a statement Tuesday. The manufacturing behemoth further revealed the restructuring will affect "all functions, businesses and geographies."

3M previously cut 2,500 international manufacturing roles in January. After the layoffs were implemented, 3M said it was expecting to save up to $900 million per year before taxes.

A spokesperson for 3M told Axios that about 600 employees from Minnesota will be affected by the layoffs – with most of the workers based at the Maplewood office.

The Minnesota corporate campus, with 10,000 employees, plays a major role in the community's economy, according to the outlet. Losing hundreds of employees will hurt affected families.

3M said it would focus on products that have high demand in the market such as climate tech, sustainable packaging and automotive electrification.

Demand for manufactured products saw a decline in recent months, reported CNN. More consumers have shifted spending to experiences instead of material things.

"Relative to the first quarter of last year, consumers have shifted their spending patterns to more non-discretionary items and retailers have aggressively reduced their inventory levels," said 3M Chief Financial Officer Monish Patolawala on a call with analysts, Reuters reported.

As a result of shifting consumer spending patterns, 3M's consumer electronic business dropped by 35% in the first quarter of 2023.

During the January layoffs at 3M, CEO Mike Roman said there were "rapid declines in consumer-facing markets," adding the company had to let go of 2,500 manufacturing roles "to align with adjusted production volumes."

3M reportedly informed staff through an internal memo as early as September 2022 that layoffs were coming. At the time, the company said it was "adjusting" to the economic downturn.

Founded in 1902 in Two Harbors, Minnesota, 3M announced mass layoffs in 2019 and 2020 but its total workforce count has been up and down over the past few years. The company said in 2022 that it has more than 90,000 employees worldwide.

Earlier this year, 3M rival Dow said it was laying off about 2,000 employees globally as part of a plan that would allow it to save $1 billion in operational costs, the Wall Street Journal reported.

The U.S. manufacturing industry has mostly caught up with backlogged orders that started during the COVID-19 pandemic. The changing environment could mean more job cuts would take place this year as there was no more need for many employees to cover backlogs.

Shannon Seery, a Wells Fargo economist, told CNN that layoffs within the manufacturing industry may be implemented this year "in an effort to protect profitability," especially with the level of outstanding backlog in recent years going down.

Some analysts believe layoffs in the manufacturing sector will be limited, unlike the widespread reductions in the tech industry. The tech industry has been implementing job cuts since last year as companies that overhired during the pandemic went on a layoff spree. As of Monday, over 600 tech companies have laid off more than 173,000 employees.

Joshua Shapiro, the chief U.S. economist at forecasting firm Maria Fiorini Ramirez, said manufacturing firms will try their best to avoid layoffs "given how difficult it has been to find labor and keep it."

Meanwhile, the downturn in the industry has also been linked to concerns about a looming recession.

Nela Richardson, chief economist at Automatic Data Processing (ADP), told CNBC in January that an increase in layoffs among temporary workers in the manufacturing industry may be a big indicator of an upcoming recession.

"Manufacturing is typically where recessions start," Richardson said. She did clarify at the time that the country was not yet going through a recession.