The deficit, a reversal of a net profit of 600,000 in 2002, was revealed in parent company Worms & Cie's 2003 annual results.

Sales were 1.5bn, a fall of 5% on 2002, while net profits before exceptional items recovered from a loss of 4.3m to a profit of 4.3m for 2003.

The job cuts will reduce its carbonless division staff to 800 by the end of 2004.

ArjoWiggins declined to comment on where the cuts would take place, but the carbonless division has plants in the UK at Dartford and Fort William, and Virginal and Nivelles in Belgium.

It will reduce its exposure to the carbonless market. This would be achieved by adding additional capacity for coated, thin, opaque, and recycled coated papers.

It is investing 10m to produce one-sided coated paper at its Virginal plant. Production will start next year.

Worms & Cie said both ArjoWiggins and its Carbonless Europe operations suffered the backlash of difficult conditions in the paper markets.

This was down to "lower selling prices, a less favourable product mix and an adverse currency effect," it said.

ArjoWiggins net profits were more than halved to 27m against 2002, with sales down 7% to 1.1bn.

Despite weak market conditions in Europe, paper merchant Antalis continued its recovery with net losses reduced by a third to 3.8m.

Sales in carbonless paper fell 9% on 2002 to 200m, 20,000 tonnes lower on the year, with prices down 7% to add to its woes.

The carbonless paper operation, famed for its Idem brand, was bought back into ArjoWiggins as part of a restructuring plan announced in October last year (PrintWeek, 2 October).