Major U.S. distributor cuts 1,278 jobs amid liquidation risk

A major U.S. wholesale distributor is preparing to eliminate at least 1,278 jobs across six states.

The move comes as it warns that it could cease operations entirely if efforts to sell assets or secure additional financing fail.

Essendant — which was acquired in 2019 by Staples, an affiliate of Sycamore Partners — distributes products and provides fulfillment services to retailers, resellers, e-commerce businesses, and other companies. 

Its network handles categories including janitorial and sanitation products, foodservice supplies, and technology products.

Staples itself is also owned by the private equity firm Sycamore Partners.

Now Essendant’s future is uncertain.

In WARN notices reviewed by TheStreet, the company said it has been exploring “various strategic alternatives.”

This includes possible sales of certain assets and operations, as well as efforts to secure additional capital to avoid liquidation.

Essendant said it does not know whether those efforts will succeed and currently expects that it will “cease its operations and close its business.”

Essendant did not immediately respond to TheStreet’s request for comment.

Essendant layoffs affect 1,278 workers in 6 states

Less than a year after Essendant told customers it was building a stronger distribution network for its next century in business, the century-old U.S. distributor is warning that it may shut down altogether.

The WARN notices and state labor records reviewed by TheStreet show at least 1,278 jobs affected.

Illinois accounts for more than half of the planned cuts.

At Essendant’s Lincolnshire operation, the company said 200 employees working at the facility and another 310 remote employees reporting to it are expected to lose their jobs, for a total of 510.

Another 134 workers are affected by the permanent closure of Essendant’s Carol Stream, Ill., facility.

In California, Essendant plans to eliminate 99 jobs at its Sacramento distribution center and another 4 at its Perris facility.

The company’s Texas WARN notice covers 136 employees at its Irving facility. 

Most of the disclosed terminations are expected on or within two weeks after October 3.

Essendant’s warning follows a major business overhaul

The potential shutdown comes less than a year after Essendant began presenting customers with what it called its “New Way Forward.”

It was an overhaul designed to concentrate the company around fewer products and a smaller distribution network.

Essendant said it would move away from the traditional office-products business and focus its resources on areas including janitorial and sanitation products, foodservice, and technology.

As part of that strategy, the distributor concentrated operations around six main distribution hubs: 

• Atlanta
• Dallas
• Chicago
• Oaks
• Phoenix
• Sacramento

Essendant described the network as a stronger and more efficient distribution system, saying the hubs would encompass more than 2 million square feet and enable one- to two-day delivery to more than 98% of U.S. customers.

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Those same six markets are now represented in the current round of WARN notices.

That means the cuts extend beyond a handful of older warehouses that Essendant had already planned to close. 

Sacramento and Phoenix were both among the six hubs Essendant identified as the backbone of its go-forward network. 

Dallas, Atlanta, and the Chicago area were also part of that six-hub strategy. Those markets now account for some of the largest workforce actions identified by TheStreet.

Essendant’s history with Staples goes back to a $996M deal

Essendant’s connection to Staples dates back to a takeover battle in 2018.

Staples initially made an unsolicited offer for Essendant while Essendant was pursuing a combination with S.P. Richards, the business-products distribution unit then owned by Genuine Parts.

Essendant ultimately abandoned that transaction and agreed to be acquired by a Staples affiliate for $12.80 per share, valuing the deal at approximately $996 million, including net debt.

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The acquisition closed in January 2019. 

At the time, Staples said Essendant would help provide reseller customers with a broader product assortment, technology, and supply chain capabilities, while Essendant and Staples would continue to operate separate sales organizations.

Both businesses were controlled by Sycamore Partners.

New financing filings appeared months before the WARN notices

The WARN filings follow changes in public financing records involving Essendant and related companies.

Illinois UCC records reviewed by TheStreet also show financing statements filed February 27, 2026, for Essendant Co., Essendant Management Services LLC, and affiliate CPO Commerce LLC, naming 1903P Loan Agent, LLC as collateral agent.

UCC financing statements generally establish a secured party’s interest in a company’s collateral. They do not, on their own, establish that a borrower is insolvent or disclose the amount, purpose, or terms of the financing.

The company did not immediately respond to TheStreet’s requests to confirm the nature of the financing.

However, multiple WARN filings provide a more significant indication of Essendant’s financial position.

Essendant told government agencies that it is pursuing both potential asset sales and additional capital, specifically “to avoid liquidation.”

For now, the company has left open the possibility that a financing or sale could change the outcome.

But without a successful transaction, Essendant has told employees that it currently expects to close its business and begin permanent terminations around October.

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