ESCANABA, Mich. (WZMQ) – Sweden-based corporation Billerud is making staffing changes that will impact workers overseas and here in the United States.
Earlier in October, the Billerud paper mill in Escanaba was idled for a week of annual maintenance. However, an extra week was added to the idle this year to “balance…production with customer needs” due to “customer inventory destocking and low demand for paper.”
According to Billerud’s acting CFO during a webcast of the company’s quarterly report, net sales of paper in North America decreased 24% from last year.
“We’re pleased with the volume growth in North America, which was 7% in line with what we saw in Europe, but also here the demand remained weak during the quarter and we definitely saw continued effects from destocking,” said acting CFO Andrei Krés.
While Krés says destocking is “largely expected” to be completed by the end of the year, the company is making changes as it looks ahead to 2024.
To “improve efficiency, profitability, and long-term competitiveness, Billerud is reducing its overall workforce by as many as 350 positions. Acting CEO Ivar Vatne says that reduction will affect Europe and North America, as well as corporate operations.
“We expect the reduction to yield annualized saving of 300 million SEK [just over $27 million USD],” said Vatne. “It’s never with a light heart we reach a decision of this magnitude, but it’s our belief that it’s needed for Billerud to continue to be well-positioned going forward.”
Billerud North America President Kevin Kuznicki released a statement on the planned reduction.
“Our management team has been discussing options for reducing the number of positions in North America that minimize the impact to our employees as much as possible,” he said. “We believe that we can accomplish the needed reduction in workforce here in North America through normal attrition based on historical rates, and strict discipline in use of contractors and hiring practices.”
Billerud has also delayed its project to transform the mills in North America. Although the project is the company’s “most important” opportunity for growth, Vatne says it has to be put on hold due to changes in the economy,
“We are looking at different alternatives—how we can optimize both the Escanaba and Quinnesec mill in the best way possible,” he said. “The main focus at this stage is to look at, how can that be done in a clever way and in creative manners? What are absolute necessities to be done in terms of the infrastructure makeup in the mill? It means certainly working closely with the suppliers to get engineering started in a good way.”
As employees await further information on the workforce reduction, Vatne says Billerud will soon be in contact with unions to begin negotiations.