Richmond-based MeadWestvaco Corp. today announced a series of cuts, including the elimination of 2,000 jobs — 10 percent of its employees — as it struggles with the recession.
The packaging company, which will move into a corporate headquarters that is to open next year in downtown Richmond overlooking the James River, announced the cost-cutting measures in a news release this morning.
Spokeswoman Alison von Puschendorf said today’s announcement will not affect the company’s plans to move from MeadWestvaco’s current space in Glen Allen. She said the company is considering leasing two floors of its new downtown Richmond building, which has nine stories.
The cuts will affect about 75 of the company's 750 employees working in Glen Allen; the new Richmond headquarters that is being built by New Market Corp. and leased to MeadWestvaco will accommodate about 1,000 people, von Puschendorf said.
“We remain committed to moving downtown and we’re looking forward to being a part of the Richmond community,” she said.
The company said the 2,000 job cuts will be spread worldwide, with about 800 of those positions to be eliminated by the end of the first quarter. MeadWestvaco said it could save up to $175 million through the job cuts.
MeadWestvaco also aims to generate $100 million in cost savings this year by reducing overhead expenses, and save $25 million by closing or restructuring 12 to 14 manufacturing locations.
“Today’s actions, combined with our strategic focus on the most profitable opportunities in our packaging end markets, will help us further strengthen our financial position and deliver maximum value to shareholders,” said John A. Luke Jr., MeadWestvaco’s chairman and chief executive officer.
Luke said the company will spread its job cuts through corporate and business staff reductions, and it will not provide 2009 pay increases for salaried employees.
In Virginia, MeadWestvaco has a paper mill in Covington that employs 1,371, a folding carton plant in Louisa County that employs about 170 people, and a paper converting plant in Low Moor, near Covington, with about 180 employees. The company released no information about whether job cuts would affect those operations.
Union officers at the Covington and Low Moor plants said today they have not received information from the company about any job cuts among hourly staff.
"We realize it is a serious situation," said Bobby Harrison, president of the United Steelworkers Local 8-675, which represents about 970 hourly employees at the Covington plant. "We feel like this facility is a top producer, and we make a good product."
The manufacturing-related reductions will include savings from facility restructurings and closures, including the previously announced closure of operations in Grover, N.C., and at two facilities in the Netherlands, in Drunen and Uden. The company has also cut staff at its consumer and office products facility in Sidney, N.Y.
“We have been taking aggressive steps over the past several months to help ensure we perform in today’s uncertain environment, and are poised to take advantage of the stronger, more stable periods that are sure to come,” Luke said.
The company began notifying affected employees of the layoffs yesterday, von Puschendorf said.
Separation times vary, von Puschendorf said.
“It’s unfortunate,” she said. “But considering what’s happening with the economy, we’re just doing what we have to do to come out of this a stronger, more profitable company.”
MeadWestvaco shares dropped 64 percent last year.
— Joe Macenka and John Reid Blackwell
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