3M Announces Mass Cutback of Workforce Amidst Downtrend in Manufacturing

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3M has become one of the corporate firms impacted by the turbulent economic period as it announced significant layoffs due to the recession and a slump in demand for goods.

6,000 Workers Set to be Discharged

Layoffs have been the most frequent event in the corporate world in 2023, spearheaded by popular firms such as Google, Spotify, Microsoft, and many more.

However, the cutbacks are now permeating the United States’ business corners. After a previous discharge of 2,500 manufacturing jobs in January 2023, 3M has today announced its plans to cut off 6,000 staff in its global offices.

The manufacturing behemoth behind some consumer brands, including Post-It Notes and Scotch Tape, said it would lay off 6,000 staff around the world https://t.co/QLM4ZLeQwm
— CNN International (@cnni) April 25, 2023

3M is a renowned American-based manufacturing company that produces various utility products such as abrasives, adhesive tape, electronic components, and other related products.

However, the manufacturing company still needs to recover from the colossal Covid-19 and its turbulent economic impacts, which are still felt today.

The company explained that the 6,000 layoffs would save up to $900 million a year before tax cuts.

While this may be seen as the worst way to start the second quarter two (Q2) of the year, 3M asserts that the cuts are necessary and are intended to add strength and focus to its crippling financial prowess.

As detailed in its official statement, the production firm iterated that the discharge of the workers will create a leaner and more focused orientation that automatically reduces costs, increases the longevity of operations in margins, and improves cash flow while navigating a new structure to drive growth.

The public statement also entails reported earnings and sales that have fallen since the start of 2022. Sales saw a reduction of 9% to 8 billion while the net income allocated to the company fell short of 25% to under $1 billion in a single quarter.

Regarding the next line of production, 3M asserted to prioritize products that record a high increase in demand, such as climate tech, industrial products, sustainable packages, and much more.

The new priority is to avoid a further downtrend of value after in-house analysts predicted a further 6% fall in sales in 2023.

The pandemic impacted global economies; however, it demonstrated that a large staff is not required to handle certain tasks.

The Economic Wrecking Ball: Employees Pay the Ultimate Price

Since the beginning of 2023, corporate bodies have found it difficult to hire resources capable of navigating workloads to efficient bits, which, of course, properly grow in output and overall profit.

So far, financial technology companies like Amazon and Microsoft have announced over 50,000 layoffs.

The news of the 3M new wave of layoff will trigger further growth of unemployed workers globally.

The United States government announced it had added 223,000 job openings early last year. However, the unemployment rate stands at its lowest in over forty years which is poor.

A spate of senior economist experts has shared their opinion on what seems to be a norm.

Bob Schwartz, the senior economist expert at Oxford Economics, iterated that the mounting layoff in the financial technology sector does not submerge the labor market as these workers are being absorbed elsewhere.

However, it is worth noting that this remains a one-sided perspective.

Newell, another industry-leading player in the manufacturing and marketing of consumer and commercial products, recently announced the layoff of its workforce, which cut deeper than 3M.

Although it remains unknown the extent to which corporate cut-off of workforces will reduce, employees hope the government will implement fallback options to reduce hardship.