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International Paper to Cut 3,000 Jobs as Part of Improvement Plan

September 11, 2003|From Reuters

NEW YORK — International Paper Co. said Wednesday that it would cut about 3,000 jobs, or 3.5% of its global workforce, over the next year as part of its previously announced $1.5-billion profit improvement plan.

Spokeswoman Jennifer Boardman said the company would make the reductions across its salaried workforce, with roughly 450 positions being cut at its operational headquarters in Memphis, Tenn.

"Some of that will be accomplished through not filling open positions and attrition," Boardman said. "I don't know how much will be ... eliminating actual working employees."

The Stamford, Conn.-based company, the world's largest forest products maker, currently has about 86,500 employees.

One analyst said he was not surprised by the news.

"They've got to dig pretty deep in order to get to the $1.5 billion," said Don Roberts of CIBC World Markets who rates the company a "sector performer" and does not own any of its shares.

"It's a pretty aggressive target," he added.

The forest products industry has been in a slump for more than three years as customers slashed orders for paper and packaging materials, causing prices to fall. During that time, International Paper sold more than $3 billion of assets.

On Tuesday, the company said Chairman and Chief Executive John Dillon would retire next month and would be succeeded by President John Faraci.

The transition was expected by Wall Street as analysts said Dillon, 65, was approaching retirement age. In addition, Faraci's promotion to the post of president earlier this year stirred speculation at the time that he would eventually be tapped to replace Dillon.

Shares of International Paper fell $1.20 to $39.43 on the New York Stock Exchange.

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