December 12, 2008 - On December 12, 2008, as part of its previously announced initiatives to reduce its cost structure by $150 to $200 million by the end of 2009, the Company informed its employees that it has committed to a plan to reduce its global salaried workforce by approximately 1,000 to 1,500 employees, to be completed primarily by the end of 2009. The reduction in workforce will occur through retirements, normal attrition and the elimination of certain salaried positions.
This plan is part of the Company's continued focus over the past several years on reducing its overhead cost structure in order to be more competitive and successful long-term. In the past year, the Company has continued its efforts by belt-tightening and other streamlining efforts in conjunction with its efforts to achieve $400 million in synergies from the acquisition of Weyerhaeuser Company's industrial packaging business. The $150 to $200 million cost reduction, which is in addition to the $400 million in synergies from the Weyerhaeuser acquisition, represents the next step in our cost-cutting efforts.
Salaried employees whose jobs are eliminated will receive severance benefits in accordance with the Company's current severance plan. In addition, affected employees whose positions are eliminated and are retirement eligible, or within three years of retirement eligibility, will receive an enhanced retirement benefit. Total cash severance costs are estimated to be $60 million to $120 million, and total costs for the enhanced retirement benefit are estimated to be $75 million to $115 million to be paid from pension plan assets.
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