International Paper Company (IP, Financial) has unveiled a significant corporate overhead restructuring plan aimed at reducing operating costs and optimizing its organizational structure. Announced on October 15, 2024, the initiative is designed to better align the company's workforce with the evolving needs of its business and customers.
The restructuring plan involves a reduction in workforce by approximately 650 employees. Affected employees will be eligible for severance payments and other termination benefits under the company's Salaried Employee Severance Plan, which includes outplacement services. These benefits are contingent upon the execution and non-revocation of a separation agreement, which includes a general release of claims against the company.
International Paper estimates that it will incur pre-tax restructuring charges ranging from $80 million to $100 million. These charges are related to one-time severance payments and other employee termination benefits. Approximately $50 million of these charges were recorded in the third quarter of 2024, with an additional $30 million to $50 million expected to be recorded in the fourth quarter of 2024. The majority of these charges will involve cash payments, anticipated to be disbursed during the first quarter of 2025.
The company notes that these estimated charges are based on certain assumptions, and actual results may vary significantly. The restructuring plan is expected to be substantially implemented by the end of the fourth quarter of 2024.
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