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Pennsylvania Faces Job Losses as Two Major Companies Cut Workforce

The impact of economic challenges on manufacturing in Pennsylvania is evident as plants close their doors.

News Summary

Pennsylvania is confronting significant economic challenges as IG Design Group Americas and Merck announce layoffs affecting over 540 workers due to plant closures. IG Design Group plans to cut 380 jobs linked to operational difficulties and bankruptcy, while Merck will close its Cherokee manufacturing plant, impacting 163 employees due to declining product demand. Both companies are offering support to affected workers as they navigate these transitions, highlighting the broader economic issues facing the region.

Pennsylvania is facing significant economic challenges as two prominent companies, IG Design Group Americas and Merck, announced plans to lay off over 540 workers due to plant closures fueled by operational difficulties and reduced demand for products.

IG Design Group Americas to Lay Off 380 Employees

IG Design Group Americas has officially submitted Worker Adjustment and Retraining Notifications (WARN) to the Pennsylvania Department of Labor & Industry, indicating a workforce reduction of 380 employees. This decision is linked to the planned closures of several facilities in Pennsylvania, including:

Berwick (Columbia County) – Warehouse facility at Third and Oak Streets, Building 426/93.
Salem Township (Luzerne County) – Main plant at Ninth Street and Bomboy Lane.
Briar Creek (Columbia County) – Administrative facility at 2015 West Front St.

The last day of employment for affected workers is anticipated to be August 26. The layoffs follow the company’s recent sale to an affiliate of Hilco Capital in May and the filing for Chapter 11 bankruptcy to safeguard asset value amidst ongoing operational challenges.

Operational Challenges and Bankruptcy Filing

IG Design Group Americas has faced multiple difficulties impacting its performance, such as losing a significant customer, JoAnn, who underwent liquidation, which adversely affected revenues. Additionally, the company pointed to the introduction of new trade tariffs and liquidity constraints as further reasons for its financial struggle. As part of the bankruptcy process, the CEO noted that the company is currently in discussions with various interested parties regarding specific business segments with the aim of navigating through its financial challenges.

Merck to Close Cherokee Manufacturing Plant

In a separate development, Merck has disclosed plans to close its Cherokee manufacturing plant located in Riverside, Northumberland County, affecting 163 employees. The closure is attributed to a declining demand for products, specifically antibiotics produced at the facility. This operational change is set to progress through three distinct rounds of layoffs, commencing in May 2025, with the final closure projected to be complete by 2026.

Support for Affected Employees

Merck has expressed its commitment to assisting the affected workforce by offering separation benefits and support during the transition period. The company has a long-standing history in Pennsylvania, employing around 14,000 individuals and investing approximately $3 billion in its operations within the state. In an effort to bolster its future capabilities, Merck is simultaneously advancing a new $1 billion manufacturing facility in Durham, North Carolina, dedicated to producing the Gardasil HPV vaccine.

Compliance with Federal Regulations

Both IG Design Group Americas and Merck have adhered to federal legislation that mandates employers to notify employees of significant operational changes well in advance. The WARN notices, filed on June 27, reflect compliance with this legal requirement, serving to inform workers of the impending layoffs and closures.

Background Context

The tumultuous backdrop for these layoffs in Pennsylvania highlights the broader economic landscape affecting various industries. For IG Design Group Americas, the company’s history in manufacturing decorative products for the floral industry has been challenged by market changes and operational hurdles. In contrast, Merck’s historical significance in the pharmaceutical industry exemplifies its ongoing adjustments to market demands.

As both companies navigate their respective transformations, the impact on local communities and economies remains a critical focus. With over 540 employees set to lose their jobs, the situation underscores the vital need for support and resources for those affected in Pennsylvania.