MEMPHIS, Tenn. — Reactions pour in, as news of a Memphis-based business announces significant layoffs.
International Paper officials confirmed the layoffs of 650 employees with ABC24 Tuesday saying, "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."
Of of those positions, 400 are from the Memphis area which equates to roughly 20% of it's local workforce.
One of the main reason for said layoffs could include the finalization of a $9.9 billion deal to acquire British based company DS Smith, according to Omer Yusuf with the Memphis Business Journal.
However, Yusuf says this will likely see a new headquarters built in England, while International Paper continues to be headquartered in Memphis stateside.
“They rejected the opportunity to be bought by a Brazilian company as well, so I think for now it’s safe to say they remain committed to being one of Memphis’ biggest public companies and being in Memphis,” Yusuf said.
Another item keeping International Paper in Memphis has been its $56 million tax break thanks to a 15-year PILOT or payment in lieu of taxes with the Economic Development and Growth Engine in Memphis.
The bigger question, according to Yusuf, will be how the layoffs will affect this agreement.
Since 2013, it has been expected IP would maintain around 2,300 employees in the Memphis area, but the company has not been able to do so since 2020.
Yusuf says it is too early to tell what the outcome will be since the layoffs have not happened yet.
After news broke, concerns quickly rose that this was a signal of the company's intention to move out of the Bluff City. However, Memphis Mayor Paul Young was quick to squash said rumors, saying in an email to ABC24:
"We deeply feel the impact of every job loss in our city, even when the ultimate intent is to strengthen the profitability and health of the company making the cuts. International Paper has stated that these layoffs were necessary to build a more robust organization; we believe their dedication to Memphis remains strong."
The Greater Memphis Chamber also stood by International Paper's commitment to the Bluff City, saying in an email:
“International Paper is an integral part of the Memphis business community. We are fortunate to have IP’s global headquarters here in our city and for its employees to call Memphis home. IP will remain committed to being a force for good in our community and a strategic partner in the continued growth of our city.”