MeadWestvaco will reduce its work force by 1,000 employees in 2004 as part of a $500 million plan to improve productivity, the company said yesterday.
MeadWestvaco said the cuts would occur at the corporate and business unit levels and would cost the company a restructuring charge of $75 million to $100 million. However, the cuts, in combination with improved margins achieved by focusing on packaging solutions and product mix upgrades as well as improved volume growth, should bring an improvement of $250 million in annual earnings, the company said.
The other half of the productivity-improvement plan involves a one-time cash-flow improvement of $250 million through inventory and receivables reductions and improved payables, MeadWestvaco said. This improvement is expected to be complete by the end of 2005.
MeadWestvaco, Stamford, CT, a paper and packaging supplier, formed in 2002 from the merger of The Mead Corp. and Westvaco Corp. Since then, the company has announced several staff and facility reductions as part of its consolidation efforts.