Essendant, a wholesale office supply company with roots dating back more than a century, is in the process of closing its operations, resulting in nearly 1,300 layoffs across six states. The company’s decision to terminate hundreds of employees ahead of a previously announced schedule has drawn scrutiny from Illinois state authorities over potential violations of the state’s Worker Adjustment and Retraining Notification (WARN) Act.
The layoffs affect employees in Illinois, Georgia, Texas, Arizona, Pennsylvania, California, and other locations. Essendant had initially notified workers and state officials in early August that it intended to close facilities and lay off staff with a 60-day advance warning period, as required by the WARN Act. Specifically, the company issued notices on Aug. 3 indicating that layoffs and closures would take effect on or after Oct. 3, including the shutdown of its Lincolnshire headquarters and a distribution center in Carol Stream, Illinois.
However, the layoffs at the Lincolnshire location were executed on Aug. 27, five weeks earlier than the date specified in the WARN notice. The terminations occurred via a mass video call, followed by letters dated Aug. 28 informing affected employees that their last day would be Aug. 31, without severance pay or additional benefits. Illinois Department of Labor spokesperson Paul Cicchini confirmed that the state has opened an investigation after receiving a complaint regarding the shortened notice.
Under Illinois law, employers with 75 or more workers must provide at least 60 days’ advance notice of mass layoffs or facility closures. Should the investigation find that Essendant violated the WARN Act, the company could be required to pay back wages and benefits to employees terminated prematurely, as well as face civil penalties.
A Chicago-based class-action law firm, Strauss Borrelli, is also conducting its own inquiry into the layoffs, inviting former Essendant employees to discuss potential legal recourse. The firm declined further comment.
Essendant, formerly known as United Stationers, evolved over decades from a small Chicago office supply store into one of the nation’s largest independent wholesalers in its industry. Rebranded in 2015 following acquisition by private equity firms, the company faced significant challenges amid changes in work trends during the COVID-19 pandemic, including decreased demand for traditional office products.
In a strategic pivot last year, Essendant announced it would exit the office products market to focus on janitorial and foodservice supplies. The company’s August WARN notices referenced ongoing efforts to explore strategic alternatives, including potential asset sales and additional financing to avoid liquidation. However, the company also acknowledged uncertainty regarding the success of these efforts and currently anticipates ceasing operations entirely.
The company’s headquarters had been relocated from Deerfield to Lincolnshire earlier this year, but with the recent layoffs and closures impacting all six distribution centers, Essendant’s longstanding presence in the office supply sector appears to be drawing to a close.
Requests for comment from Essendant and its private equity owner, Sycamore Partners, went unanswered. Meanwhile, Sycamore has recently been active elsewhere, acquiring Walgreens in a multibillion-dollar transaction.
Essendant’s sudden layoffs and potential violation of labor laws highlight ongoing tensions between workforce protections and corporate restructuring in a shifting economic landscape.