Processing Magazine

International Paper to cut up to 1,500 jobs

December 15, 2008

The Associated Press reports that International Paper Co. will eliminate 1,000 to 1,500 salaried jobs by the end of next year as the "next step" in cost-cutting moves. The company has been closing mills and production facilities in the face of weakening demand for paper products. The job cuts will lead to savings of $150 million to $200 million by the end of next year according to the company. They estimated severance costs at $60 million to $120 million, plus $75 million to cover extra benefits for workers who are retirement age or eligible to retire within three years. Those benefits will be paid from pension plan assets. The company said they expect to achieve the cuts through retirements, attrition and eliminating some positions. At the beginning of the year, IP had 51,500 employees. IP disclosed the cuts in a regulatory filing and said it had informed employees. The job cuts are part of a plan to make the company more competitive. It is seeking to wring $400 million in savings from the $6 billion purchase of Weyerhaeuser Co.''s packaging facilities in August. In the past three months, IP has responded to high raw materials costs and weak economic conditions by cutting capacity. It announced it was shutting down a pulp mill in Louisiana, closing a paper-production machine at a mill in Virginia, idling a containerboard machine in Oregon for at least three months, and idling another containerboard machine in Oklahoma for an indefinite period.