Restructuring Actions

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

2023 to 2025 Structural Reorganization Actions

In the first quarter of 2023, 3M announced it would undertake structural reorganization actions to reduce the size of the corporate center of the Company, simplify supply chain, streamline 3M’s geographic footprint, reduce layers of management, further align business go-to-market models to customers, and reduce manufacturing roles to align with production volumes. During the first six months of 2023, management approved and committed to undertake associated actions impacting approximately 5,100 positions resulting in a pre-tax charge of $52 million and $212 million in the first and second quarters of 2023, respectively. Remaining activities related to the restructuring actions approved and committed under this initiative are expected to be largely completed through the end of 2023. 3M expects to commit to further actions under this initiative. This aggregate initiative beginning in the first quarter of 2023 and continuing through 2025 is expected to impact approximately 8,500 positions worldwide with an expected pre-tax charge of $700 million to $900 million over that period.

The related restructuring charges for periods presented were recorded in the income (loss) statement as follows:


(Millions)	Three months ended June 30, 2023		Six months ended June 30, 2023
Cost of sales	$	47	$	63
Selling, general and administrative expenses	146		178
Research, development and related expenses	19		23
Total operating income impact	$	212	$	264

The business segment operating income (loss) impact of these restructuring charges is summarized as follows:


	Three months ended June 30, 2023						Six months ended June 30, 2023
(Millions)	Employee Related		Asset-Related and Other		Total		Employee Related		Asset-Related and Other		Total
Safety and Industrial	$	44	$	—	$	44	$	54	$	—	$	54
Transportation and Electronics	25		—		25		37		—		37
Health Care	10		—		10		12		—		12
Consumer	13		—		13		16		—		16
Corporate and unallocated	100		20		120		125		20		145
Total operating expense	$	192	$	20	$	212	$	244	$	20	$	264

Restructuring actions, including cash and non-cash impacts, follow:


(Millions)	Employee-Related		Asset-Related and Other		Total
Expense incurred in the first quarter of 2023	$	52	$	—	$	52
Incremental expense incurred in the second quarter of 2023	192		20		212


Non-cash changes	—		(20)		(20)
Cash payments	(56)		—		(56)
Accrued restructuring action balance as of June 30, 2023	$	188	$	—	$	188

2022 Restructuring Actions

Operational/Marketing Capability Restructuring:

As described in Note 5 in 3M's 2022 Annual Report on Form 10-K, in late 2020, 3M announced it would undertake certain actions beginning in the fourth quarter of 2020 to further enhance its operations and marketing capabilities to take advantage of certain global market trends while de-prioritizing investments in slower-growth end markets. In the first quarter of 2022, management approved and committed to undertake the remaining actions under this initiative resulting in a pre-tax charge of $18 million. This initiative, beginning in 2020 and ending with committed first quarter 2022 actions, impacted approximately 3,100 positions worldwide with a pre-tax charge of approximately $280 million over that period. Activities related to this restructuring were largely completed in the third quarter of 2022.

Divestiture-Related Restructuring:

As described in Note 5 in 3M's 2022 Annual Report on Form 10-K, during the third quarter of 2022, following the Food Safety Division split-off transaction and combination with Neogen completed in September 2022 (see Note 3 in 3M's 2022 Annual Report on Form 10-K) management approved and committed to undertake certain restructuring actions addressing corporate functional costs across 3M in relation to the magnitude of amounts previously allocated to the divested business.

These actions affected approximately 850 positions worldwide and resulted in a third quarter 2022 pre-tax charge of $41 million, within Corporate and Unallocated. The associated accrued restructuring balance as of December 31, 2022 was $10 million and remaining activities related to this divestiture-related restructuring were largely completed through the first half of 2023.