UPDATE: Nov. 14, 2024: International Paper released additional details about its corporate layoffs in Memphis, Tennessee, in a WARN notice filed with the state on Nov. 13. A total of 297 employees will be affected, with layoffs occurring Jan. 1-3, 2025. The listed locations are two different buildings at its corporate headquarters in Memphis, a spokesperson said via email. These layoffs are included in the October number, not separate from it, the spokesperson explained.
These employees are not represented by a collective bargaining agreement and do not have bumping rights. IP is working with the Greater Memphis Chamber to coordinate services for affected employees.
Oct. 17: International Paper intends to lay off 650 employees, the company confirmed Wednesday.
About 400 of the layoffs will be employees based in Memphis, Tennessee, where IP’s corporate headquarters is located. And 89 people will be laid off as of Nov. 18 at a corrugated sheet plant in San Antonio, according to a WARN notice filed with the state of Texas on Oct. 10. That facility will close, according to the San Antonio Express-News. IP did not comment on where the other layoffs would occur or if any other facilities would close.
The layoffs are a streamlining step, according to a company spokesperson’s email Wednesday afternoon. The company wouldn’t say whether the cuts are related to IP’s pending merger with DS Smith, which is expected to close this quarter after shareholders for both companies overwhelmingly approved the deal in separate votes last week.
“International Paper is undergoing a transformational journey to become a stronger, more profitable sustainable packaging solutions company. A critical step in this journey is to organize our teams and resources to create the most value for customers and shareholders. As a result, we are reorganizing our corporate overhead structure,” spokesperson Amy Simpson said via email.
International Paper will provide severance packages, outplacement assistance and mental health resources to all affected employees, Simpson confirmed.
In his first earnings call as CEO, Andy Silvernail said in July that the company’s performance deteriorated over the last decade. He spent much of the call describing planned changes, including his introduction of an 80/20 operating system to reposition IP toward profitability. Silvernail gave a presentation about the strategy in August, detailing the focus on reducing business complexity and investing in core priority areas, like the box business.
The approach involves portfolio simplification and asset rationalization, which could cause short-term challenges but potential growth in 2025, said Michael Roxland, senior paper and packaging analyst at Truist Securities, in a Wednesday afternoon note to investors.
“This announcement is consistent with our thesis that new CEO Mr. Silvernail will look to streamline IP and undertake a strategic, commercial, and cultural reset,” Roxland said, adding that it appears IP is determining “the minimum resources needed to efficiently operate as a public company.”
In October last year, IP announced another large layoff, which affected 900 employees. This included plans to permanently close a containerboard mill in Orange, Texas, and to end production at a pulp machine in Riegelwood, North Carolina, and another in Pensacola, Florida.
