American multinational 3M has confirmed a global restructure that has led to job cuts in its New Zealand offices.
The company did not say how many jobs would be affected in NZ but said “6000 positions globally” would be impacted.
A 3M spokeswoman told the Herald: “In April 2023, 3M announced it is taking restructuring actions across all geographies including New Zealand, businesses, and functions.”
She said: “The restructuring actions are intended to make 3M stronger, leaner and more focused.”
She confirmed it would offer redundancy pay to departing employees: “We are offering severance and other support to impacted employees in New Zealand.
“We will follow all relevant local regulations as we do consultations around the world,” the spokeswoman added.
The 6000 job cuts are on top of the 2500 it announced in January.
In April the Financial Times reported that 3M planned to cut a further 6000 jobs globally as part of restructuring actions it hoped would help it reduce costs and improve margins as it battles slowing consumer demand.
The Minnesota-based company said it expected to take pre-tax charges of US$700m ($1.121 billion) to US$900m, including those actions announced earlier this year, and that about half of those charges would come in 2023.
3M reported a 9 per cent drop in sales to US$8b in its first quarter, while reported earnings per share were down 50 cents from a year ago to US$1.76. Those were ahead of Wall Street forecasts.
Despite the job cuts its financials show the business is doing well in New Zealand.
3M New Zealand’s annual financial report for the year ending December 31, 2022 showed the net profit came to $24,601m, up 60 per cent on the previous year with revenue for the same period at $206,585m - up 23 per cent on 2021.
This year, BusinessDesk reported a 2400 per cent swell in its NZ profits in 2021 with sales enabled by 3M’s pre-existing position as an approved supplier and established supply chain to hospitals and district health boards.
Its NZ division, based in Albany, registered a net profit of $15.4m in 2021, a staggering increase from $608,000 in 2020.
The company was the main supplier of N95 masks to the Ministry of Health during the pandemic. An official information act request showed 3M NZ supplied almost 92 million masks between July 2020 and July 2022, dwarfing competing suppliers.
But while they have done well financially in New Zealand, the company has faced legal challenges internationally.
In 2018, the Herald reported that 3M settled a lawsuit with Minnesota’s Attorney General Lori Swanson for between US$500m and US$1b after the state sought US$5b for natural resources damage and human health problems it said were linked to a chemical formerly used in Scotchgard.
The state said 3M contributed to health problems including cancer and premature births outside Minneapolis.
The company faced controversy for its use of perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA) used in stainproof and waterproof treatments, and food packaging.
The state reported higher rates of cancers, leukemia, premature births and lower fertility in the suburbs east of St Paul prior to 2006, when there were particularly high amounts of the chemicals in its water supply.
The conglomerate started as the Minnesota Mining and Manufacturing Company in the early 1900s, with its current headquarters still based in Minnesota.