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3M to cut 1,500 jobs
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July 23, 1998: 9:07 a.m. ET
Scotch tape maker hopes cuts will temper Asian effect; 2Q beats street
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NEW YORK (CNNfn) - Minnesota Mining & Manufacturing Co. said Thursday it plans to cut 1,500 jobs by the end of the year in a bid to fend off anticipated losses due to the Asian crisis, a slowdown in economic growth, and a strong U.S. dollar.
The St. Paul, Minn.-based maker of such brands as Scotch Magic Tape and Post-It Notes, more commonly known by its trademark 3M, said the reductions will be achieved primarily through attrition and continue "until we regain and sustain our productivity-improvement targets."
3M employs about 75,600 workers across its industrial and consumer segments.
The announcement came as 3M reported a nearly 8 percent decline in second-quarter earnings, just above previously downgraded Wall Street projections.
Net income fell 7.7 percent to $386 million from $418 million a year earlier. Diluted per-share earnings fell 5.1 percent to 94 cents from 99 cents in the year-ago period. The results beat Wall Street consensus estimates by 2 cents.
Worldwide sales totaled $3.77 billion, down 1.2 percent from a year earlier.
Net income in the first half fell to $786 million, or $1.92 a diluted share, from $828 million, or $1.96. Sales slumped to $7.47 billion from $7.53 billion a year earlier.
The company said changes in currency rates had reduced per-share earnings for the quarter by 12 cents, or 12 percent, and sales by 5 percent. The results marked the 11th straight quarter of negative currency effects, 3M said.
Despite sales gains in Europe and Latin America, overall growth was held in check by a 2 percent decline in volume in the Asia-Pacific area.
The company said it expects higher second-half earnings and full-year sales similar to last year's, excluding a 1997 gain on the sale of its outdoor advertising business.
"We're assuming that the economic troubles in the Asia Pacific area will persist, that the growth of the U.S. economy will continue to moderate, and that the U.S. dollar will remain strong," said L.D. DeSimone, 3M's chairman and chief executive officer.
3M said it sees "solid" growth in a number of U.S. businesses, led by pharmaceuticals, auto body repair, home improvement, occupational health and safety, and commercial graphics.
Shares of 3M (MMM) ended down 1-9/16 at 80-7/16 Wednesday on the New York Stock Exchange. 
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