JAY – Wausau Paper announced Thursday that it would temporarily cut two production days a week and lay off about 40 people due to high energy and fiber costs and fewer orders.

“It is intended to be temporary, and we can’t say how long because we just don’t know. It’s economically driven,” said Gary Rudemiller, vice president of operations of the specialty products division.

The mill’s energy comes from oil and electricity bought off the grid, and those costs are rising as well as costs for pulp needed to make products, Rudemiller said.

That, along with the general economic sluggishness, which has affected the mill’s customers as well as the mill, called for a reduction in operations, he said.

The mill will go from running seven days a week, 24 hours a day, to five days a week, but continue to operate around the clock on April 21, Rudemiller said from his Wisconsin office.

The company has about about 245 employees at the Jay mill, and about 40 hourly workers will be laid off, he said.

Not all of the employees will be laid off at the same time, he said, though it will occur over a short period of time.

Two of the mill’s core products are painters’ tape and release liners, the papers that peel off the back of sticky name tags.

Employees were told of impending downtime Thursday through meetings and communications, Rudemiller said.

The mill has a union that operates by seniority.

The Jay mill has the capacity to produce 74,000 tons of product annually, and the company has domestic and global customers, according to its Web site.

Kim Lavoie, president of Local 11 of the United Steel Workers Union at Wausau, wouldn’t comment on the situation.

“It is a loss for the people who have worked there, and I know people are probably feeling uneasy about the future, and I feel bad about that,” Town Manager Ruth Marden said.

Wausau Paper mill is partially located in Livermore Falls.

Livermore Falls Town Manager Martin Puckett said he had been in contact with a mill official and asked what the town could do it weather the situation.

“We’re here to provide any help. We’re here to help work out solutions to these issues,” Puckett said. “It’s terrible to see that trends in the national economy have come to Livermore Falls.”

Wausau Paper is headquartered in Mosinee, Wis., and had record revenues of more than $1.2 billion in fiscal 2007. It produces and markets fine print and and writing papers, technical specialty papers and “away from home” towel and tissue products, according to its Web site www.wausaupaper.com. The company experts to release its 2008 first-quarter financial results on Monday, April 28, after the close of the New York Stock Exchange.