3M To Cut 1,500 Jobs, Lowers Outlook As Q3 Sales Continue Fall

The company had a considerable sales decline in its Industrial segment, which 3M says was negatively impacted 8.0 percent from currency headwinds.

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Manufacturing conglomerate 3M reported its 2015 financial earnings on Thursday, which included a cut in its earnings forecast and the announcement of job layoffs as the company's sales continued a downward trend.

3M reported that Q3 sales fell 5.2 percent year-over-year to $7.7 billion, while profit fell 0.5 percent to $1.3 billion. Organic sales grew 1.2 percent and acquisitions added 1.0 percent growth, while the company said foreign currency headwinds had a negative 7.4 percent effect on sales.

The company lowered its 2015 sales growth forecast to 1.5 to 2.0 percent, down from its previous guidance of 2.5 to 4 percent.

With that, St. Paul, MN-based 3M said it plans to cut 1,500 jobs worldwide as part of a restructuring plan that will "further strengthen its competitiveness," and give the company a pre-tax savings of $130 million in 2016. It expects to take a pretax charge of about $100 million in Q4 to cover the restructuring costs.

3M said the plan focuses on reducing structural overhead, largely in the U.S.

Inge Thulin, 3M CEO"We are building a stronger, more streamlined and more focused company that can compete and win for years to come," said Inge Thulin, 3M’s chairman, president and CEO in a statement.

The job cuts would equate roughly 1.7 percent of 3M's 89,800 employees it had as of Dec. 31, 2015. 

3M's Industrial segment had Q3 sales of $2.6 billion, down 7.1 percent from last year. Organic sales increased 0.2 percent, acquisitions boosted sales 0.7 percent, and currency headwinds reduced sales by 8.0 percent. The company said organic sales growth was led by automotive OEM, 3M purification, abrasives, and industrial adhesives and tapes, while advanced materials declined. Sales declined in the U.S., and grew in Latin America/Canada, Asia Pacific, and EMEA. Operating income of $580 million declined 5.8 percent.

3M's Safety and Graphics segment had Q3 sales of $1.4 billion, down 2.2 percent from last year. Organic sales increased 2.9 percent, acquisitions boosted sales 4.2 percent, and currency headwinds reduced sales by 9.3 percent. The company said organic sales growth was led by roofing granules, commercial solutions, and personal safety, while traffic safety and security each declined. Sales increased in the U.S., Asia Pacific, and EMEA, and declined in Latin America/Canada.

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