3M cuts 1,500 jobs and heads in new direction
St. Paul, Minnesota based manufacturing conglomerate 3M reported its 2019 fourth quarter and full-year financial results on Tuesday and announced a new operating model and operating structure that includes cutting approximately 1,500 jobs.
The company said that following the implementation of a new ERP system and the April 2019 move from five to four business groups — Safety & Industrial, Transportation & Electronics, Health Care and Consumer — its new model is based around each segment having full responsibility for all facets of strategy, portfolio optimization and resource prioritization across their entire global operations.
The new model was implemented January 1st.
3M noted that under the prior model, area and country teams — which comprised 3M’s International Operations organization — were responsible for setting priorities in their regions. Now, all 3M employees report to the business groups and functions they are part of, and 3M no longer has an International Operations organization.
All of 3M’s international employees now report into the business groups and functions they are part of, and 3M no longer has an International Operations organization.
The company said benefits of the new operating model include more accountability to its business groups; stronger customer insight; empowering employees to make decisions faster; organizational streamlining, and leveraging strengths across markets.
To support the realignment, 3M:
- Is consolidating manufacturing, supply chain and customer operations in to a new Enterprise Operations organization focused on optimizing the customer experience;
- Has formed a new global Corporate Affairs organization focused on advancing and protecting the company’s brand and reputation;
- Realigned all existing corporate functions to drive more effective operations
As a result of those actions, 3M has initiated restructuring that will reduce approximately 1,500 positions across all business groups, functions and geographies. 3M took a pre-tax restructuring charge of $134 million in the Q4 2019 and expects annual pre-tax savings of $110 to $120 million, with 2020 savings of $40 to $50 million.
Mike Roman
“3M continues to transform how it operates and build a more customer-driven and streamlined organization for the future,” said Mike Roman, 3M chairman and chief executive officer. “The latest phase of our transformation journey is designed to improve growth and operational efficiency, and will enable us to create even more value for our customers and shareholders. This is a defining moment in how we run our company, and positions 3M for success in the years ahead.”
With the restructuring announcement, 3M also said that international operations executive vice president Julie Bushman has announced she will retire effective April 1st.
