CLEVELAND, Ohio — Sherwin-Williams announced plans to temporarily suspend the company’s matching contributions to employee 401(k) plans, citing weak sales amid economic and tariff headwinds.
In an internal communication obtained by cleveland.com, CEO Heidi G. Petz attributed the decision to several factors, including high mortgage rates that have pushed housing demand to near-historic lows and inflation that has reduced DIY demand for three consecutive years.
Tariff policies have also decreased industrial demand and increased costs for the paint and coatings manufacturer, Petz’s letter stated.
“Sherwin-Williams is not immune from these conditions, which have lasted longer and been more impactful than anticipated…Unfortunately, customer demand remains soft, and in some areas, it’s getting worse,” Petz stated.
The suspension, which goes into effect Oct. 1, affects the company’s current policy of matching 100% of the first 6% of eligible employee 401(k) contributions. The company implemented similar suspensions during the 2009 financial crisis and 2020 COVID pandemic, eventually restoring full matching as conditions improved, Petz said.
The CEO said Sherwin-Williams intends to do the same in this case, but did not share a potential timeline for when full matching would be restored.
Sherwin-Williams has already undertaken what Petz described as “disciplined, responsible and aggressive” cost-saving measures, including reducing third-party spending, simplifying operations, delaying new hires and restructuring global assets, the letter stated.
In March, the company offered voluntary buyouts to some employees to reduce staffing and simplify management layers. Julie Young, vice president of communications, said at the time that eligible employees who chose to leave by June’s end would receive “enhanced financial support to pursue other career opportunities or retirement.”
Adding to the company’s challenges, its new Cleveland headquarters project has faced delays due to issues with fire-retardant coating on steel beams. The 36-story building, originally scheduled to open in 2023, was expected, as of March, to open in the last three months of 2025. The building is expected to house approximately 3,100 employees.
Despite financial difficulties, Petz said the company maintains its commitment to long-term growth investments, including expanding its store network and field sales force.
Sherwin-Williams anticipates its economic challenges to persist through at least the first half of 2026, according to the letter.
“We are confident this temporary suspension will help us navigate the current environment while preserving our ability to invest in our people and our future,” Petz stated.
This story was written with the assistance of AI.
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