Solventum, Minnesota’s newest public company, laying off employees

Minnesota’s newest public company, Solventum, launched a round of layoffs Wednesday as CEO Bryan Hanson told employees the company is “creating an organization that is more nimble, more decentralized with less hierarchy.”

Hanson sent a video message to all 22,000 of the health care company’s employees early Wednesday morning to talk about “the elimination of certain jobs” and shifting “resources away from certain areas to focus on others,” the CEO said in the video, according to a transcript reviewed by the Minnesota Star Tribune.

The company confirmed in an emailed statement that it is cutting positions across divisions.

“These decisions were not taken lightly and affected employees are being supported,” the statement said. “We will continue to invest in our people and hire the talent we need into roles aligned to our strategic priorities.”

The number of job losses was not available beyond Hanson saying “the largest majority of our team members will not be directly impacted by these job losses or job eliminations.”

Nearly 1,200 people work for the company in the east metro. Several employees said the size of the layoff had not been communicated, even if it had hit their teams.

Hanson said in the video: “We may be eliminating these positions to refocus our investments, but that doesn’t mean that the team members in these impacted positions don’t matter. They absolutely do matter.”

“That doesn’t mean that we will never face tough decisions just like this one,” he said. “This is a challenging week, and I would just simply ask that you keep in mind that your colleagues may be experiencing different degrees of change right now.”

Hanson said he will hold a virtual meeting Tuesday to answer questions and provide more details.

For the latest reported financial quarter, Solventum said its operating margins sagged more than 10% compared with the year before. Hanson said at the time while the company is “clearly off to a solid start, it is not lost on us that revenue growth remains below market.”

Overall, Solventum reported adjusted net profits of $285 million on $2 billion in sales for the quarter that ended Sept. 30. Adjusted profits fell more than 40% compared to the performance of the same four divisions when they were a part of 3M.

The 3M health care unit spun off into its own company April 1 and remains headquartered in Maplewood for now. The company is moving its Minnesota operation to Eagan in the coming years.

Hanson said the company is on track to complete the majority of its 3M separation activities on its original timeline of 12 to 24 months.

“This performance turnaround will take time,” Hanson told analysts recently. “But rest assured: We are moving with urgency while also being thoughtful and strategic about building and investing for the long term.”