Global Paper and Packaging Industry Bleeds in August: Major Layoffs by Top 10 Giants Affect Thousands

Multiple large enterprises announced extensive business adjustments in August to address the current challenges.

International Paper: International Paper is undertaking sweeping reforms of its North American packaging business, with plans to permanently close its Savannah containerboard mill, Savannah packaging plant, and Riceboro containerboard mill in Georgia by the end of September 2025, resulting in approximately 1,100 layoffs.

Smurfit Kappa plans to close a corrugated packaging plant in Cedar Rapids, Iowa, resulting in approximately 100 layoffs. The company will relocate production to other facilities and provide reemployment assistance to affected employees. This is not an isolated case; earlier this year, Smurfit Kappa announced the closure of plants in Illinois, Oregon, Minnesota, Texas, and other locations, involving hundreds of employees.

Nohwlex: Nohwlex announced that it will permanently close a factory in Bakersfield, California on October 14, resulting in the layoff of 127 employees. This is part of its operational integration following the acquisition of Pactiv Evergreen. In June of this year, Pactiv Evergreen also closed a factory in Kalamazoo, Michigan due to integration, laying off 153 employees.

Silgan will implement temporary layoffs at its two plants located in Modesto and Antioch, California, affecting a total of 150 employees. The layoffs will begin in October.

In addition to the restructuring of large enterprises, many small and medium-sized enterprises are also facing severe survival challenges.

Cold chain technology company: This thermal packaging solutions provider will lay off 82 employees at its headquarters in Franklin, Massachusetts, and plans to move part of its business to Tennessee and Texas. The layoffs are scheduled for the period from October to December.

McIntosh Box and Pallet Company: The company plans to permanently close a plant located in Benson, North Carolina, laying off 43 employees. The closure is scheduled for October 27.

UFP Industries: UFP Industries has confirmed the closure of its UFP Packaging and UFP Site Built plants located in Park, and is encouraging affected employees to transfer within the region, even offering relocation assistance to move employees to other plants in Pennsylvania and the Northeast.

In Europe, paper companies are also experiencing the pains of transformation, with layoffs and investments occurring simultaneously, reflecting a dual strategy of seeking breakthroughs amid adversity.

As a subsidiary of International Paper, DS Smith plans to restructure its paper business in Belišće, Croatia, and has initiated closure negotiations with employee representatives. This plant is the company’s only paper production facility in Croatia and is equipped with two machines for producing recycled corrugated case materials.

UPM-Kymmene's adhesive materials company also announced that it will cease label material production at its Nancy plant in France and transform it into a distribution center to continue serving customers in Western Europe. This adjustment will affect up to 82 positions. The company executives stated that this move aims to improve overall profitability, maximize synergies, and enhance cost efficiency and product quality through centralized production.

Sappi Paper's German operations are also facing immense pressure. Following the sale of the Maastricht plant in the Netherlands in 2023 and the closure of the Stockstadt plant in Bavaria in spring 2024, the paper mill located in Ehingen, Baden-Württemberg, has also fallen into crisis. Although it has not yet been officially closed, the company has begun negotiations with employee representatives, planning to lay off up to 100 workers, accounting for one-fifth of the plant's total workforce. In a letter to employees, the company frankly admitted that despite multiple measures taken, the plant still incurs monthly losses of 2 to 2.5 million euros, due to rising costs, intense industry competition, and the impact of U.S. tariff policies. Future measures may include reducing shifts and adjusting production lines to further cut costs.

Behind these layoffs and factory closures lies a profound structural adjustment underway in the global paper and packaging industry.

Firstly, the global economic downturn has led to weak consumer demand, directly affecting the market demand for packaging products. As consumers' purchasing power declines, retailers and manufacturers' demand for packaging also decreases, resulting in a drop in orders for the paper and packaging industries, and the problem of overcapacity has become increasingly prominent.

Secondly, the continued high costs of raw materials and energy are another straw that breaks the camel's back for enterprises. Although pulp prices have recently fallen, overall production costs, especially energy costs, remain high. This makes it difficult for many factories, particularly those that are outdated and inefficient, to maintain profitability. The monthly loss of several million euros at Sappi's German plant is a typical example of this issue.

Third, structural adjustments in the supply chain are accelerating. Many companies are reshaping their production networks by shutting down high-cost, low-efficiency factories and concentrating production in more competitive regions. This is not only to reduce costs but also to improve production efficiency and optimize services. The actions of companies such as International Paper and Finoah reflect this trend.

Fourth, industry consolidation and technological upgrading are major trends for the future. Companies like NovoLex are integrating resources through acquisitions and phasing out outdated production capacity in order to gain an advantage in fierce market competition. At the same time, to meet ever-changing consumer demands and environmental regulations, enterprises must increase investment in new technologies and new materials. This undoubtedly poses a huge challenge for small and medium-sized enterprises that lack sufficient financial strength.

In summary, the wave of layoffs in August is not an isolated incident, but rather an inevitable response by the global paper and packaging industry to multiple pressures such as economic downturn, high costs, overcapacity, and structural adjustments. It can be expected that this trend will continue in the coming years, with industry consolidation and technological innovation becoming key to the survival and growth of companies. Those unable to adapt to the new environment will face elimination, while those that can adjust flexibly and embrace change will be able to find new growth opportunities after the storm.