[DWM] has confirmed that Masonite Corp. will close its door fabrication plant in Stockton, Calif., displacing 100 or more employees. In a notification letter filed with California’s Workforce Services Division, officials said the company expects the closure to be permanent, with operations set to be phased out between April 2023 and May 5, 2023. Workers will continue to be employed through at least May 5 but will be released through May 31, 2023.

According to a recent 10K filing with the Securities and Exchange Commission (SEC), in December 2022 the company implemented a plan to improve overall business performance, including optimization of its manufacturing capacity. The plan includes reductions in “overhead and selling, general and administration workforce, primarily in the North American residential segment.” The optimization of manufacturing capacity involves “specific plants in the North American residential segment,” the company reported. Costs associated with its plan include severance and closure charges, continuing through 2023, the SEC filing stated. Ultimately the company expects to increase its annual earnings and cash flows by approximately $15 million to $20 million.

In its letter to the Workforce Services Division, the company points to “a decrease in demand in the housing market,” echoing parts of its recent SEC filing. In a 10K report filed for the fiscal year ended January 1, 2023, officials cited “continued macro-economic conditions of high inflation and rising interest rates,” as primary culprits.

“During the second half of [2022], base volumes decreased in our North American residential segment due to new housing weakness and wholesale inventory destocking with the residential repair, renovation and remodeling channel remaining resilient until late in the fourth quarter,” the company’s report stated.

Officials described the current housing market as “volatile,” also mentioning “elongated build cycles” stemming from issues of labor shortage and supply chain constraints. The filing also mentioned increases in the number of multi-family starts, while just 10% of the company’s sales worldwide go to non-residential sectors.

By the end of 2022, the residential repair, renovation and remodeling market accounted for over half of the company’s net sales, with North American residential sales comprising 79%. Masonite’s doors are primarily sold through wholesale and retail distribution channels, the largest of which includes The Home Depot, which accounts for around 22% of the company’s sales.

The closure of Stockton marks Masonite’s second in six months, including another facility, in Walkerton, Ind., where it shed up to 84 jobs.

When asked if additional closures are on the way, the company failed to comment.