IP Lays Off 1,600 Workers, Closes Mills

MEMPHIS, Tenn. (TheStreet) -- International Paper(IP Quote), the country's largest maker of cardboard box materials, announced on Thursday that it is laying off 1,600 workers and closing several plants.

The layoffs will eliminate 3% of its 57,000-man workforce.

The company will also close plants in Albany, Ore., and Pineville, La., and permanently shut the now idled mill in Valliant, Okla.

>> See U.S Layoffs Mount

"The company's demand is not expected to return to 2008 levels in the near future," IP said in a statement. "Therefore, permanent IP capacity closures are necessary."

These moves, which will take place from December through the spring, will reduce International Paper's capacity by 13%, or 2.1 million. The company's capacity has stood at about 16 million tons.

"We have concluded that we have excess capacity in our North American paper and packaging businesses, and these decisions will better match our supply with our expected customer demand," CEO John Faraci said in a statement.