International Paper to Cut 9,000 Jobs in Restructuring

International Paper Co., the world’s largest paper producer, on Tuesday said it plans to eliminate 9,000 jobs, or 10% of its work force, as it restructures its printing paper business.

The job reductions will come largely through a sale of assets that is expected to generate more than $1 billion. International Paper said the moves were mostly responsible for a substantial earnings reduction in the recently completed second quarter, resulting in a loss for the period.

“We will be divesting or closing operations that no longer meet the company’s financial or strategic objectives and utilizing plants and machinery to serve customers more efficiently,” said Chairman and Chief Executive John T. Dillon.

“These actions will enable us to improve the company’s return on investment,” he said.

As a result of the charges, International Paper, based in Purchase, N.Y., reported a second-quarter loss of $419 million, or $1.39 a share, compared with a profit of $99 million, or 33 cents a share, a year ago. Revenue fell to $5 billion from $5.1 billion.

Wall Street, though, reacted with enthusiasm to the program, driving International Paper shares up 9.6%. The shares closed at $56.13, up $4.94, on the New York Stock Exchange.

The paper industry has been having a difficult time lately, suffering from falling prices and excess manufacturing capacity. IP said conditions have begun improving.

“IP is moving in the right direction and, yes, obviously it’s going to be a big beneficiary of paper prices moving up,” said an analyst at UBS Securities.