SKOWHEGAN — Sappi Fine Paper North America is cutting 5 percent of its work force nationwide, including an undisclosed number of positions at its paper mills in Westbrook and Skowhegan.
The job cuts come in response to a challenging market environment and further steps to reduce costs, according to a company statement. The cuts include permanently eliminating 110 salaried and hourly positions, according to the company. Of those, approximately 30 are active employees who lost their jobs, with the remaining reductions eliminated by not filling open positions and an overall reduction in force.
The company is not releasing information on cuts at specific sites, according to Mark Hittie, Sappi’s director of marketing and communications.
Sappi employs about 800 people at its Skowhegan mill, 340 at its Westbrook mill, 50 at the Tech Center in Westbrook and about 130 at the corporate office in South Portland. It also has a mill in Minnesota and another corporate office in Boston.
Positions were eliminated at all Sappi locations and across all functions in North America, the company statement said. Job cuts even included the position of Joanna Rieke, the company’s longtime manager of corporate communications in Boston, according to the company.
However, employees in Skowhegan with direct knowledge of the situation said the cuts were not believed to have resulted in any outright worker layoffs at the Somerset facility. The employees, who asked not to be identified because they were not authorized to speak, said the cuts in Skowhegan were described to staff as involving eliminating vacant jobs, moving other positions around to fill holes and some shift reductions.
“Reducing our salaried and hourly work force is an extremely difficult decision but one necessary to reduce cost, remain competitive, and support our ability to deliver against Sappi’s long-term strategic initiatives, while continuing to meet the needs of our customers,” Sappi’s statement says. “We remain committed to our work force and the community at all of our facilities and will continue to selectively hire and provide training and scholarship assistance to new talent seeking a rewarding career in the paper industry.”
Sappi North America President and CEO Mark Gardner sent a statement to employees Tuesday saying about 50 salaried positions and 60 hourly positions were cut across the company’s North American operations.
“I am personally very aware of the impact this decision has on our affected employees,” Gardner said in the statement.
He said the company will provide separation benefits to salaried employees, while discussions will be held with union officials regarding the impact on hourly employees.
Gardner said Sappi’s operating income for the first six months of fiscal year 2014 was far lower than expected.
“It is imperative for us to focus on good cash management and running operations as efficiently as possible,” Gardner wrote to employees.
In the first six months of the 2014 fiscal year, Sappi North America has generated $2 million in operating income, which Gardner said is “well below plan and last year.”
At the Skowhegan mill, 2,200 tons of coated paper are made, rolled, wrapped and put on trucks and rail cars each day for use on glossy pages and covers of fashion magazines all over the world. The mill, on U.S. Route 201, is the seventh-largest paper mill in the world, according to the company.
Sappi, with New Balance Athletic Shoe Inc., is one of the top two employers in Somerset County. The company ranks in the top 20 employers in Maine when including employees from its Westbrook mill, according to state labor statistics.
Sappi bought the S.D. Warren Co. from Scott Paper Co. in 1994. It is a publicly traded company with about 15,000 employees worldwide.
The company pays the town of Skowhegan about $9.76 million in real estate and property taxes annually.
The federal government’s latest list of the biggest polluters in Maine released in February includes the Sappi mill in Skowhegan. It was third on the list of the state’s 10 biggest polluters, with more than 2 million pounds of toxic chemicals emitted.
The company’s Westbrook operation also made the list as the state’s eighth-largest polluter, with about 257,000 pounds of emissions.
Press Herald Staff Writer Whit Richardson contributed to this story.
Doug Harlow can be contacted at 612-2367 or at: