HELSINKI (AP) -- The world's largest magazine paper maker UPM-Kymmene Corp. said Tuesday it will lay off 870 workers in Finland and close plywood and sawmills as the economic downturn continues to hit the industry.

Most of the permanent layoffs will be in the plywood and sawn timber sectors of the Finnish company's operations at several domestic mills, where earlier this year it temporarily laid off some 1,200 workers to save costs.

UPM said it also plans to invest euro25 million ($37 million) to expand operations at other mills, with estimated restructuring costs of euro44 million.

The announcement follows UPM's earnings report last week which saw it swing into a third-quarter net profit despite a drop in sales. CEO Jussi Pesonen said that demand had started to bottom out but cautioned that the recession continues to hit demand for all of UPM's products.

Last year, UPM closed mills in Finland and slashed 700 jobs. It also announced plans to cut thousands of jobs worldwide during the next few years.

The Helsinki-based company has 64 production plants in 14 countries. It employs 23,200 people, down from 25,600 a year earlier.