(Reuters) -International Paper ( IP ) on Friday said it will shut two U.S. packaging plants by January as the company cuts costs and consolidates operations amid weak demand.

  The closures will affect facilities in Compton, California, and Louisville, Kentucky, impacting 218 employees. International Paper ( IP ) said production will shift to nearby sites.

"The company will work to minimize the impact on employees by using attrition, retirements and current vacancies at other International Paper locations," Tom Hamic, executive vice president and president of North American Packaging Solutions, said.

The company, which acquired UK-based DS Smith earlier this year, has been reshaping its portfolio. In August, it sold its global cellulose fibers unit to American Industrial Partners for $1.5 billion to focus on sustainable packaging.

International Paper ( IP ), the world's largest packaging company by revenue, posted a quarterly loss in October after taking a $1 billion impairment charge tied to the fibers unit sale.

It has also shuttered underperforming plants in the UK and Europe and raised prices as the sector grapples with soft demand and higher costs, including tariffs imposed under U.S. President Donald Trump.