International Paper announced Friday it plans to close a facility in Compton, California, and another in Louisville, Kentucky, by January 2026.
A total of 218 employees will be affected: 125 at Compton and 93 in Louisville. The company says it will work to minimize the impact on employees and will provide outplacement assistance, access to mental health support resources and severance benefits.
“Making the decision to close a facility is incredibly difficult, especially knowing the impact it has on our team members and their families,” said Tom Hamic, executive vice president and president of North American Packaging Solutions, in a statement.
Customers serviced by these two corrugated container production sites will be supplied by other nearby locations moving forward, according to IP.
The company says in a news release that it’s undergoing a “transformational journey to become a stronger sustainable packaging solutions company” and streamlining its footprint is a critical step.
Last year, CEO Andy Silvernail launched an 80/20 business optimization plan shortly after he joined the company, which has resulted in a sweeping company reorganization. The evolution to change focus areas and become more profitable has included a series of facility closures in the United States. This year IP began implementing the optimization plan in Europe as well, following following the company’s acquisition of London-based DS Smith in January.
Including the California and Kentucky closures — and this week’s announcement of five planned closures in Germany to affect 500 people — the streamlining has affected at least 4,585 employees since October 2024. International Paper reported in an annual securities filing that as of Dec. 31, 2024 — prior to the DS Smith acquisition — it had approximately 37,000 employees; that’s down from the roughly 39,000 it reported as of December 2023.
The layoffs tally total does not include employees who worked at facilities IP divested this year. The company sold five plants in Europe to Germany-based Palm Group as required by the European Commission to approve the DS Smith acquisition; sold assets in Mexico to Mexican packaging and materials company Acabados de Papeles Satinados y Absorbentes, or APSA; sold its bag converting operations to ProAmpac; and is selling its global cellulose fibers business to private equity firm American Industrial Partners.
Silvernail said on the company’s Oct. 30 earnings call that the 80/20 transformation “strategy is getting traction” and executives are “delighted to see the progress in North America.” The organization simplification is helping to “sharpen our focus and liberate resources,” he said. Silvernail also said during this week’s Baird Global Industrial Conference that after the GCF divestiture in a few months, International Paper will be a pure-play packaging company.
Executives on the earnings call also described soft demand and noted it contributed to the company lowering its guidance for full-year earnings results. IP now projects 2025 earnings before interest, taxes, depreciation and amortization of $3 billion, down from the April expectation of between $3.5 billion and $4 billion. Executives also project that full-year box shipments will be down 1% to 1.5% for 2025 instead of up by the same range.
