The company says it is planning to save €54m in annual costs and cut the workforce by 600, half of which will come in the Building and Living operations, which includes timber. The divisional head Hannu Kasurinen is to leave his role.

The Sollenau sawmill in Austria is to be downsized, some production at the Pfarrkirchen mill in Germany is to be transferred to the cheaper Czech Republic operation and efficiency improvements are planned for the Kitee and Honkalahti mills in Finland.

Cost reduction measures are planned in all other units within Building and Living, which are projected to bring €30m in annual savings and cut staff by 300.

Stora Enso warned of cost-cutting measures earlier this month when it reported the sawn timber business had suffered a 54% slide in annual earnings before interest and tax. Profits fell to €28.8m from €62.8m in 2011.

"In the Building and Living business area we do not expect any significant improvement to the depressed European construction activity or high raw material costs," said Stora Enso CEO Jouko Karvinen.

The company is still comfortably the largest sawmiller in Europe even though wood product deliveries were down 6.3% to 5.07 million m3.

Group-wide, Stora Enso reported sales of €10.8bn in 2012, compared with €10.96bn a year ago. Profits before tax were up to €481.7m from €420.9m in 2011.