Sherwin-Williams (SHW) — the 159-year-old paint and supplies giant — has taken the unusual step of suspending its employee 401(k) matching program as it grapples with weakening sales.
An internal company memo obtained by Cleveland local news revealed that the company will pause its 401(k) match beginning Oct. 1, citing a slowdown in DIY demand tied to the broader housing downturn.
CEO Heidi G. Petz said housing demand nationwide has been squeezed by high mortgage rates and affordability challenges.
“Unfortunately, customer demand remains soft, and in some areas, it’s getting worse,” she wrote in the memo.
Under its existing program, Sherwin-Williams matched 100% of the first 6% of eligible employee contributions — a benefit documented in company filings as far back as 2009.
While Sherwin-Williams has paused its 401(k) match in past downturns, the latest cut is drawing heightened scrutiny amid today’s economic headwinds.
The move also raises the risk that other firms could follow suit, viewing it as a justifiable cost-cutting measure given Sherwin-Williams’ size and nearly $90 billion market value.
At minimum, the move underscores a sobering reality: in today’s economy, even cornerstone benefits like 401(k) matches are vulnerable when corporate performance falters.
Not a common practice yet
While many companies are under pressure from weaker consumer demand, tariffs, and other headwinds, suspending 401(k) contributions remains rare.
One of the few comparable examples came earlier this year from Werner Enterprises (WERN), a Nebraska-based truckload carrier listed on the Nasdaq, which halted its 401(k) match as part of a $40 million cost-cutting initiative.
“As part of our previously communicated $40 million cost savings initiative for 2025, Werner is taking intentional steps to streamline operations and position the company for long-term growth,” the company disclosed in May.
Beyond that, suspensions of employer matching are few and far between among publicly traded firms.
Sherwin-Williams under pressure
Sherwin-Williams is coming off a difficult second quarter, with earnings per share falling 14.3% to $3.50. Revenue inched up just 0.7% to $6.31 billion.
More concerning, the company cut its full-year outlook, now projecting earnings between $11.20 and $11.50 per share, down from a prior range of $11.65 to $12.05, citing weak demand.
“Demand was softer than anticipated through June, and we do not see catalysts to change that trajectory at this time, causing us to adjust our full-year guidance downward,” CEO Heidi Petz told shareholders.
Shares of Sherwin-Williams have reflected the company’s underlying uncertainty, slipping nearly 4% over the past year to trade around $360.
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