Verso to Lay Off 1,000 Employees Due to Coronavirus Shutdown

Verso plans to lay off 1,000 workers and idle paper mills in Minnesota and Wisconsin.
Author:
Publish date:

Verso  (VRS) - Get Report said Tuesday that it would lay off about 1,000 employees as the coated-paper maker idles paper mills in Duluth, Minn., and Wisconsin Rapids, Wis.

The Miamisburg, Ohio, company said the move aimed to offset the "unprecedented market decline" created by the coronavirus pandemic.

Shares of Verso at last check were off 4.9% to $16.17.

Verso said that it expected to idle the Duluth mill by the end of June and the Wisconsin Rapids mill by the end of July.

Verso said in a statement that it was "exploring viable and sustainable alternatives" for both mills, including restarting if market conditions improve, marketing for sale or closing permanently.

The company said that stay-at-home orders that governments and health officials enacted to help curb spread the coronavirus outbreak "have significantly reduced the use of print advertising in various industries, including retail, sports, entertainment and tourism."

North American printing and writing demand fell by 38% year-over-year in April and operating rates are expected to drop well below 70% during the second quarter, Verso said, citing statistics from Fastmarkets RISI, which tracks the forest-products sector.

"It is critical that we maintain a healthy balance sheet and focus on cash flow, while balancing our supply of products and our customers' demand," said President and Chief Executive Adam St. John in a statement. 

"We expect the idling of these facilities to improve our free cash flow. The sell-through of inventory is expected to offset the cash costs of idling the mills."

Verso said it would continue to supply graphic and specialty papers in roll and sheet form, as well as packaging papers and pulp.