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IP cuts 3,000 jobs
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June 25, 2001: 5:52 p.m. ET
Company will trim 10 percent of U.S. workforce in bid to cut costs
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NEW YORK (CNNfn) - International Paper said Monday it will eliminate 3,000 jobs, or 10 percent of its domestic workforce, as part of an effort to reduce costs, and better align its resources with the company's core businesses of paper, packaging and forest products.
Monday's announcement was the second round of layoffs the company set following a dismal first-quarter earnings report which showed that the company's profit dropped 90 percent from the same quarter a year earlier.
IP, the world's largest paper and forest products company, blamed the drop in profit on the slowdown in the U.S. economy, coupled with the strong value of the dollar, which it said hurt its competitiveness in overseas sales.
Analysts polled by earnings tracker First Call are expecting an even steeper decline in the company's second-quarter earnings. The current consensus estimate is for a profit of 4 cents per share, suggesting a 94.6 percent decline from 75 cents per share during the same period last year.
Executives at International Paper in Stamford, Ct., have been looking for ways to cut costs and optimize profits in the face of slowing and uncertain economic conditions.
The company moved its headquarters to Stamford last month after acquiring Champion International in May 2000.
In late April, the company indefinitely closed its mill in Moss Point, Miss., and fired its 375 employees, citing high costs and a lack of demand for the bleached board product it made.
The majority of the job reductions announced Monday will take place over the next year through a streamlining of its staff support functions, as well as by organizational changes within several of its operating businesses, IP said.
"Our capacity management and divestiture efforts, coupled with a rigid financial discipline, are having a favorable impact on our performance and will continue," John Dillon, IP's chairman and chief executive, said in a statement Monday.
"But the market and economic conditions we are facing require that we further reduce costs within the company," Dillon added. "We are realigning our resources as necessary to improve our financial results, while continuing our commitment to serve our customers."
Shares of IP (IP: Research, Estimates), a component of the Dow Jones industrial average, closed Monday at $35.40, down 60 cents, on the New York Stock Exchange. Over the past year, the stock has ranged between a low of $26.31 and a high of $43.31. 
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