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International Paper Shuts Down Four US Facilities, Cuts Workforce
Workforce Reduction Amid Softer Demand
International Paper announced the closure of four production facilities in the U.S. and plans to lay off about 1% of its global workforce due to declining demand for packaging products. The company employs 65,000 people worldwide and will cut 495 hourly workers and 179 salaried workers.
Declining Demand for Premium Packaging
The Memphis, Tennessee-based company has experienced weaker demand for its higher-priced paper packaging as consumer goods companies seek cost-effective alternatives. This trend has contributed to financial challenges, including a surprise fourth-quarter loss reported last month.
Facility Closures and Capacity Reduction
Among its nearly 200 factories in the U.S., International Paper will close the following facilities by the end of April:
- A containerboard mill in Louisiana
- A recycling plant in Arizona
- A box plant in Pennsylvania
- A sheet feeder plant in Missouri
The closure of the Louisiana mill alone will reduce the company’s annual containerboard capacity by approximately 800,000 tons.
Recent Acquisition and Strategic Streamlining
In January, International Paper acquired UK-based DS Smith in a $7.23 billion deal. To streamline operations, the company has been optimizing its U.S. production footprint, citing high costs affecting sales volumes.
Further Business Adjustments
In October, the company announced it would explore options to sell its global cellulose fibers business, which produces absorbent pulp for sanitary napkins and related products. Additionally, International Paper plans to close its pulp mill in Georgetown, South Carolina.
As of December 2023, the company operated 204 production sites in the U.S.
“International Paper Shuts Down Four US Facilities, Cuts Workforce”