3M plans 1,500 job cuts as dollar pinches overseas sales

NEW YORK -- 3M Co. plans to cut 1,500 jobs in a global restructuring effort as the maker of touchscreens and Post-it Notes fights sluggish growth overseas and a strong U.S. dollar that's crimping sales.

The workforce pullback, about 1.7 percent of 3M's total at the start of the year, was announced Thursday along with a reduction in the top end of the company's 2015 profit forecast. 3M also lowered its full-year revenue projection.

The currency squeeze highlights 3M's dependence on international business, which accounts for about two-thirds of revenue, and echoed the experience of many U.S. manufacturers. Of 32 companies in the Standard & Poor's 500 Industrials index reporting third-quarter results, 22 posted sales that missed analysts' estimates, according to data compiled by Bloomberg.

"The current economic growth environment remains challenging," Chief Executive Officer Inge Thulin said on a conference call. The restructuring plan is designed to make 3M "a stronger, more agile, more focused company."

Since becoming CEO in 2012, Thulin has emphasized organic growth in overseas markets and new-product development. This year, he has reshaped 3M with deals that include its largest- ever acquisition.

3M said its restructuring plan, which will result in a fourth-quarter pretax charge of about $100 million, will focus on reducing U.S. overhead and retrenchment in slow-growth international markets. The St. Paul, Minnesota-based company had about 89,800 workers at the beginning of the year.

Excluding restructuring costs, 2015 earnings will be $7.73 to $7.78 a share, 3M said. The previous high end of the range was $7.93 a share. Third-quarter profit of $2.05 a share topped the $2 average of 13 projections compiled by Bloomberg.

Organic local-currency sales growth will be 1.5 percent to 2 percent, compared with a previous projection of 2.5 percent to 4 percent. Quarterly sales fell 5.2 percent to $7.7 billion, trailing the average estimate of $7.84 billion. Foreign currency translation trimmed sales by 7.4 percent, 3M said.

While sales grew 1.2 percent on an organic local-currency basis, the total "was significantly below our expectation," Steven Winoker, an analyst with Sanford C. Bernstein & Co., said in a note.

During the quarter, Thulin extended a plan to overhaul 3M with the hiring of Goldman Sachs to study selling or spinning off the Health Information Systems unit. The move built on agreements earlier this year to buy Polypore International Inc.'s separations media business for $1 billion and a safety- equipment maker for about $2.5 billion.

This story was originally published October 22, 2015 at 11:57 AM with the headline "3M plans 1,500 job cuts as dollar pinches overseas sales ."