3M to Cut 5,000 Jobs, Abandon Videotape Field
3M is quitting the videotape business, a field the company helped invent almost half a century ago, eliminating 5,000 jobs in a bid to boost profits.
It also is spinning off its data storage and imaging systems businesses, Chief Executive L.D. DeSimone said Tuesday.
The company’s best known products, including Scotch tape and Post-it notes, are not affected by the restructuring.
Wall Street applauded the moves. On Tuesday, Minnesota Mining & Manufacturing Co. jumped $2.625 to $61.625 on the New York Stock Exchange.
DeSimone had hinted of the restructuring in October, saying 3M was looking at options, including getting rid of less profitable businesses, and hoped to do so without layoffs.
The company, which produced the first commercially successful recording tape in 1947, a precursor to modern-day videotape, is discontinuing its audio tape and videotape business in the next year.
“Despite strong efforts and many successes . . . this business has not been able to achieve a satisfactory return on investment in recent years because of intense price competition,” DeSimone said.
3M had been struggling to match cost-cutting by foreign players in the heavily-competitive recording tape business.