Smurfit Westrock announced a series of upcoming production line and facility closures late Wednesday, ahead of its first-quarter 2025 earnings release.
The company will close its coated recycled board mill in St. Paul, Minnesota, and stop production at its containerboard mill in Forney, Texas. The specialty coating facility at Forney will not be affected. Smurfit Westrock also initiated talks with local work councils in Germany about closing two converting facilities there.
The company did not provide further details Wednesday on the timing for any of these closures.
The company estimates the U.S. closures will reduce its containerboard and CRB production capacity by more than 500,000 tons. Together, the U.S. and Germany closures are expected to affect approximately 650 employees. The company says it will provide employees with severance and support such as career transition assistance and relocation opportunities, where possible.
“While closing facilities is never an easy decision, it is based on a realistic expectation of current and future capacity needs, operating costs and an unrelenting focus on improving our business,” CEO Tony Smurfit said in a statement. “We are very grateful for the significant contributions made by the teams at these locations over the years and we will do all we can to support them throughout this process.”
The company expects it will incur $99 million in pre-tax charges from these closures, according to a Wednesday securities filing. That breaks down to approximately $42 million for severance payments to former employees and $57 million for other restructuring costs. Most of the charges, $226 million worth, are expected to be realized in the second quarter, while the remaining $61 million is expected to be recognized during the rest of this year and into 2026.
Since Smurfit Kappa completed its acquisition of WestRock in July 2024, company executives have repeatedly discussed streamlining efforts to evaluate legacy business units and assets for footprint optimization. The company has announced numerous facility closures in recent months, including a corrugated products plant in Portland, Oregon, where a phased shutdown will begin in June. Earlier this year, Smurfit Westrock also announced it would close a container plant in Bridgeview, Illinois, with layoffs slated for March.
In October 2024, Tony Smurfit said on an earnings call that Smurfit Westrock had recently eliminated 800 positions amid other cost-cutting measures, and in February he gave an update that streamlining had resulted in more than 1,000 people already departing the company or doing so soon.
