Lincoln Paper and Tissue Co. plans temporary layoffs and salary decreases in response to the current market downturn, according to a press release issued Tuesday by Keith VanScotter, president and CEO of the company.
Effective March 16, the company will place 17 production workers on temporary layoff for three months; place most hourly maintenance workers on temporary layoff each Friday for one day over a three-month period; and reduce pay for all salaried employees by 15 percent for three months.
“We regret having to take this action, but we believe the company must protect its financial position and employees’ jobs during these most difficult times,” VanScotter said in the press release.
The company cited the deteriorating economic conditions in the paper and forest products industry, and the collapse of global pulp and paper markets over the last six months, “with all producers experiencing dramatically reduced demand and record price declines,” according to the release.
“[Lincoln Paper and Tissue Co.] has undertaken extensive cost-cutting measures, which we are confident will reduce our operating costs by several millions of dollars on an annual basis. In addition, we have taken other steps to conserve cash by reducing our capital program to minimum levels,” VanScotter said in the release.
He said given the unstable nature of the economy, “conditions could very well get worse before they get better, and we will be prepared to weather them. Therefore, we are acting defensively by taking [these] cost-cutting measures to ensure that we can withstand what may lie ahead.”