UPDATE 1-UPM to cut jobs in Finland, take Q4 hit

* To close mills, 870 Finnish jobs affected

* Restructuring costs seen at 44 mln euros

* To invest 25 mln euros in other Finnish mills

HELSINKI, Nov 3 (Reuters) - Finnish papermaker UPM-Kymmene (UPM1V.HE) said on Tuesday it would slash some 870 jobs in Finland due to weakness in the plywood and timber markets, and take a one-off restructuring hit in the fourth quarter.

"The challenging market situation of plywood and timber products has continued since last autumn and UPM has been forced to implement large production curtailments and temporary lay-offs in all of its mills," the firm said in a statement.

"The Timber business will also start (talks) with employees in all the other Finnish units on continuing temporary production curtailments in 2010," it said.

UPM said it aimed to close mills in Heinola, Kaukas and Parkano during the first half of 2010, and cut jobs in other Finnish mills. It said it would take a restructuring hit of 44 million euros ($65 million) in the fourth quarter.

It said it would invest 25 million euros to revamp production at selected Finnish mills including Savonlinna.

The global paper industry has struggled for the better part of a decade to climb out of a slump as soft demand and overcapacity have kept prices down.

The current global economic downturn has further eroded demand for basic materials such as paper, as print advertising has dropped steeply.

UPM said last week in its third-quarter results it aimed to boost profitability in its Plywood unit in the coming quarters. UPM Plywood employs some 2,450 people in Finland and Timber has around 900 staff. ($1=.6769 Euro) (Reporting by Brett Young; Editing by Hans Peters)