3M has announced plans to restructure that it says will "affect all functions, businesses, and geographies" and could yield a cost savings of $700 million to $900 million, and will involve 6,000 additional job cuts.
The structural reorganization will reduce the size of the corporate center of the company, simplify supply chain, streamline 3M's geographic footprint, reduce layers of management, and further align business go-to-market models to customers.
These restructuring actions are expected to affect all functions, businesses, and geographies and will impact approximately 6,000 positions globally, in addition to the reduction of 2,500 global manufacturing roles announced in January 2023. 3M anticipates annual pre-tax savings of $700 million to $900 million upon completion of these actions.
"To strengthen 3M for the future, today we announced actions that will reduce costs at the corporate center, further simplify and strengthen our supply chain structure, and streamline our go-to-market business models, which will improve margins and cash flow," said 3M chairman and CEO Mike Roman continued. "We will continue to prioritize investments in high-growth end markets where 3M science gives us a clear competitive advantage."
Roman said 3M will reduce rooftops worldwide, including exiting its conference center in northern Minnesota, move its technology to the cloud, and remove hundreds of legacy systems.
“Not all of these costs are just people-related costs,” EVP, CFO, and Chief Transformation Officer Monish Patolawala said on the earnings call. “We’re taking a lot of other costs out from the center of the company, we’re reducing rooftops, etc, which allow us to exit some of these cost structures faster and that’s where you get a better payback.”
3M also announced changes to its leadership. The company appointed Michael Vale as its group president and chief business and country officer, a new role created for its corporate operations committee, effective April 25. Vale will oversee three of 3M’s four business groups, as well as customer operations, country governance and emerging markets.
Just in January this year, 3M cut 2,500 manufacturing jobs.