Nordic paper maker Stora Enso Oyj said Thursday it will lay off 2,000 employees to cut annual costs by euro250 million as it reported a first-quarter net loss of euro36 million ($47 million).
The company had posted a profit of euro66 million in the same period last year. Revenue fell 25 percent in January through March to euro2.13 billion from euro2.8 billion in 2008.
The Finnish-Swedish group said its result was hit by mill closures and that demand for all its products "weakened significantly." It gave a negative outlook for paper markets, particularly in Europe and China.
Stora Enso ( SEO - news - people ) said the layoffs, which would also seek to make the company "simpler, faster-reacting and more focused," would be mainly in administration.
The company's stock closed up 3 percent at euro3.84 ($5.01) on the Helsinki Stock Exchange.
CEO Jouko Karvinen said the period was "as demanding as we had expected" and gave a bleak outlook.
"The decline in demand led to a large cut of almost one quarter in production compared with the first quarter of the previous year," Karvinen said. "Our forecast for the second quarter is for more of the same - significant production curtailments and a strong focus on cash flow and margin quality, together with tight control of capital spending and expenses."
Stora Enso is one of the world's largest forest product companies making magazine paper, newsprint, fine paper, pulp and packaging boards. It has 85 production plants in more than 35 countries and employs 29,000 people, down from 34,000 a year earlier.
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