On August 21, 2025, International Paper Co. unveiled a sweeping reorganization of its U.S. operations that reflects both the pressures of a changing global market and the company’s pivot toward more profitable, growth-oriented sectors. The Memphis-based paper and packaging giant announced it will close two paper mills in Georgia—one in Savannah and another in Riceboro—resulting in the elimination of approximately 1,100 jobs. Simultaneously, the company confirmed the sale of its pulp and paper division to private equity firm American Industrial Partners for $1.5 billion, and a $250 million investment in its Selma, Alabama facility to expand cardboard production.
The decision to shutter the Georgia facilities comes as part of a larger cost-cutting and optimization initiative. The Savannah mill, in operation since the 1930s, employs nearly 800 people and has long been a fixture in the region’s industrial economy. The Riceboro mill, though smaller, supports around 300 workers. Both facilities are expected to cease operations by the end of September. These closures will reduce International Paper’s containerboard production capacity by about 1.43 million tons, a significant cut in its manufacturing footprint.
The financial implications of the restructuring are equally substantial. The company anticipates $570 million in asset write-downs related to the mill closures and approximately $158 million in associated costs, including severance, site remediation, and transition support for impacted workers. While the closures are intended to streamline operations and remove underperforming assets from the balance sheet, they have sparked concern among local leaders and residents.
Savannah Mayor Van Johnson expressed disappointment in the announcement, noting the historical and economic significance of the mill to the city. Georgia House Speaker Jon Burns echoed those concerns, emphasizing the ripple effect the closures will have—not only on the workers but also on the regional timber industry, local suppliers, and small businesses that have long relied on the mills’ economic presence.
Despite the difficult decisions in Georgia, International Paper’s concurrent investment in Selma, Alabama represents the company’s clearest signal of future direction. The $250 million infusion will be used to expand capacity at the facility, specifically to increase the production of containerboard, which is used in cardboard boxes and other forms of packaging. As online shopping continues to grow and consumer preferences tilt toward sustainable materials, demand for cardboard packaging has surged. This trend aligns with the company’s strategy of focusing on high-margin, value-added products in the packaging sector.
The shift is also consistent with broader industry dynamics. As digital media reduces the need for traditional paper products and environmental pressures force companies to reevaluate supply chains, firms like International Paper are increasingly prioritizing packaging as a core growth area. By shedding legacy operations and doubling down on automation, efficiency, and sustainable materials, International Paper aims to maintain its leadership in a more competitive global landscape.
The sale of the pulp and paper division to American Industrial Partners further illustrates this strategic realignment. By exiting the pulp market, International Paper is simplifying its business model, allowing greater focus on packaging, where it sees more durable and profitable demand. The transaction is expected to close by the end of the year, pending regulatory approval.
The reorganization comes at a time when many legacy manufacturing companies are making similarly difficult choices. As pressures from international competition, labor costs, and changing consumer behaviors continue to mount, firms are finding themselves forced to reevaluate long-standing operations. For International Paper, the latest moves signal a clear break with the past, aimed at positioning the company for long-term competitiveness and adaptability.
While the Selma investment has been welcomed as a sign of economic vitality in Alabama, the company has pledged to work with state and local officials in Georgia to assist affected workers during the transition. Workforce retraining, job placement services, and community support initiatives are expected to play a part in mitigating the impact of the closures.
Ultimately, the company’s latest announcement underscores the balancing act between cost efficiency and strategic reinvestment. It highlights a company responding to market realities with bold, if painful, decisions—trimming its industrial footprint while building capacity where demand is rising. In doing so, International Paper hopes to secure its future in a sector where innovation, sustainability, and adaptability will determine who thrives in the years ahead.