UPM will lay off 200 workers at two pulp and paper mills in Finland to further cut costs and adjust to difficult economic conditions.

The job cuts, at the Kaukas mill and Kymi mills in southeastern Finland, come a month after UPM said it will ax 850 jobs in the plywood sector and sawmills in Finland this year. By the end of the year the Kaukas mill will employ about 700 people and the Kymi mill will have 600 workers, UPM said.

In 2009 UPM announced major production cuts and warned that it will close plants and slash some 1,600 jobs worldwide during 2009 and 2010.

"The business environment of the pulp and paper industry continues to be challenging. The purpose of the planned restructuring is significant improvement in cost competitiveness and productivity also in the long term," said Arto Lampinen, a senior vice president in UPM's paper business group