3M announced Monday it would cut 5,000 jobs, or about 7 percent of its workforce, in the next 12 months in an effort to streamline the company. 3M also announced a 7 percent dip in first quarter earnings.
About half of the jobs will be outside the United States.
"While no one likes to eliminate jobs, this action is consistent with our resolve to achieve solid growth, make the whole organization faster, and advance 3M to an even higher level," said W. James McNerney Jr., chairman and chief executive.
The company also has launched new initiatives to drive long-term growth, profitability and cash flow and said it would take a one-time charge of about $600 million over the next few quarters as a result of the moves.
The restructuring is expected to save about $300 million, before taxes, once the plan is completed, McNerney said.
For the quarter ended March 31, 3M earned $453 million, or $1.13 a share, compared to $487 million, or $1.21 a share, a year earlier.
Excluding $14 million in one-time charges, 3M earned $467 million, or $1.16 a share in the first quarter, meeting the expectations of analysts surveyed by Thomson Financial/First Call. Excluding a one-time gain of $31 million a year earlier, 3M earned $456 million.
Revenues rose 2 percent to $4.17 billion, from $4.08 billion.
"Our people delivered solid results under extremely difficult U.S. economic conditions, continued strengthening of the U.S. dollar and sharply higher energy costs," McNerney said.
Currency effects reduced earnings for the quarter by 7 cents per share and higher U.S. energy costs reduced earnings by 4 cents per share. McNerney said aggressive global cost control combined with good international volume gains largely offset these negative pressures.
"We are intensely focused on driving down costs to deliver positive earnings growth in an uncertain global economic environment," McNerney said.
The cost-cutting measures should enable 3M to achieve annual earnings of between $4.75 and $5 per share, he added. 3M earned $4.68 per share last year, excluding non-recurring items.
The company expects second-quarter earnings to be about the same as last year, he said.
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