International Paper said it was shutting down four production facilities in the US and laying off about 1% of its global workforce to tackle softer demand for its packaging products from e-commerce and consumer goods firms.
Shares of the company, which reported a surprise fourth-quarter loss last month, rose about 2% in early trading.
Memphis, Tennessee-headquartered International Paper has seen tepid demand for its pricey paper packaging as consumer goods companies temper inventories and opt for cheaper packaging options to lower costs.
The company, which employs 65,000 people globally, said it would lay off 495 hourly workers and 179 salaried workers in total.
International Paper, which bought UK rival DS Smith in a £5.8-billion ($7.23 billion) deal in January, has been streamlining its operations in the United States as higher prices hit sales volumes.
Plant Closures
Of its nearly 200 factories in the US, a container board mill in Louisiana, recycling plant in Arizona, box plant in Pennsylvania and sheet feeder plant in Missouri would cease operations by the end of April, International Paper said.
Closing the Louisiana mill would reduce its annual container board capacity by about 800,000 tonnes, the company said.
International Paper said in October it would explore options to sell its global cellulose fibres business that makes absorbent pulp for products such as sanitary napkins and close its pulp mill in Georgetown, South Carolina.
The company had 204 production sites in the United States as of December 2023.
"The decision to close any facility is difficult because of the impact on our team members, their families and the surrounding communities," said Tom Hamic, executive vice president and president of North American packaging solutions at International Paper. "We greatly appreciate the contributions from our departing team members and will do all we can to support them."
News by Reuters, additional reporting by ESM.
