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Cramer On Layoffs At 3M, Elsewhere: Investors Must Separate 'Stocks From People'

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Cramer On Layoffs At 3M, Elsewhere: Investors Must Separate 'Stocks From People'

3M Company (NYSE: MMM) joins the growing list of large-cap companies laying off thousands of workers — but investors should view this favorably, according to CNBC's Jim Cramer.

Tough Action: Companies are making tough decisions to fire workers by the thousands, and it comes at a time when their top line is "not that bad," Cramer said on "Squawk on the Street." Investors need to distinguish "stocks from people," he said.

In 3M's case, the company is letting go of 2,900 positions globally to generate $200 million to $250 million in annual pre-tax savings. To help with the loss of manpower, companies are tapping technology to create better analytics and generate superior efficiencies, Cramer said.

Related Link: 6 Cloud Stocks KeyBanc Likes Right Now

How It's Possible: Companies like Snowflake Inc (NYSE: SNOW) are able to help companies become more efficient by offering digital workflows that unlock productivity, Cramer said.

Put differently, companies like Snowflake allow companies to do more with fewer workers, the CNBC host said.

The trend of companies letting go of employees that are no longer "needed" may be part of the current "revolution" in technology, he said. 

"We have some amazing companies ... and they are doing things that make it so that you can — I don't want to say get away with firing, but you just don't need to hire nearly as many people than you currently have," Cramer said. "And it's going to cause a ripple across the economy."

 

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