(The Hill) – American manufacturing giant 3M will cut 6,000 jobs to reduce costs as global demand for goods slows, the company said Tuesday.
The layoffs are in addition to the 2,500 job cuts 3M announced earlier this year. The Minnesota-based company plans to reduce its workforce by around 10 percent.
3M CEO Mike Roman said on an earnings call that the layoffs “will span all functions, businesses and geographies.” The layoffs will reduce costs by up to $900 million annually.
3M, which manufactures a wide range of products including N95 respirators and Post-it notes, pointed to “significant weakness in consumer electronics and consumer retail.”
The company plans to invest in industrial automation as part of its effort to boost factory productivity. 3M said it will focus on “high growth markets” such as electric vehicles, personal safety, home improvement, microchips and health care.
3M noted that a decline in demand for respirators hurt its sales. The company’s withdrawal from Russia also took a toll on its finances.
Tuesday’s announcement is yet another indication that the U.S. economy is slowing and American workers will be impacted.
Demand for goods exploded during the pandemic as Americans stayed home more often. But consumers have increasingly shifted their spending toward services like travel and restaurants.
When accounting for inflation, consumer spending is down 2% since last year, according to Census Bureau data released earlier this month. The report noted huge drops in spending at gas stations, general stores, electronics retailers and furniture stores.
The spending shift, in addition to unsnarled supply chains, has led to a rapid slowdown in manufacturing. The Federal Reserve Bank of Richmond’s index of manufacturing activity slipped in April, capping off months of substantial declines, amid falling shipments and new orders.