WEST Somerset's economy was dealt a bitter blow this week with the announcement that one of its major employers - Wansbrough Paper Mill - is to slash its workforce by almost a third with the loss of 50 jobs. One of the mill's two machines will close by the end of June, reducing the annual output of paper by 35,000 tonnes to 115,000 tons. News of the redundancies, said to have stunned the 168 staff at the Watchet-based company, came in special briefings carried out by general manager David Foulds which began on Tuesday. Mr Foulds met leaders from the UK's largest manufacturing union Amicus, senior managers and all other staff as part of a statutory 30-day consultation period. The St Regis-owned complex is part of the paper division of London-based holding enterprise DS Smith, which published details of a series of cost reduction measures being implemented across the group in its pre-close trading update this week ahead of its preliminary annual results. The company is blaming rising energy costs and a significant downturn in demand for the specialised paper produced by the machine earmarked for closure, used in envelope manufacture, bag- making and corrugated packaging. Mr Foulds told the Free Press that the job losses would be "across the site", affecting all departments from administrative office posts to maintenance workers and admitted that even his own job was under scrutiny. He said he hoped to tell staff as soon as possible where the axe would fall but ongoing talks with union leaders would hopefully pinpoint those prepared to take voluntary redundancy or early retirement. "Some of our staff have worked here for 40 years," said Mr Foulds. "There is no easy way to break this sort of news and it would be fair to say that everybody was very stunned. "The mood is pretty downbeat but we have to do the very best we can for everyone. "We will be setting up a job club for those affected, helping with CVs, interview techniques - anything at all that we can do to help. "We are only too aware of the implications of this in an area like Watchet where there is very little alternative employment." A total of 25 staff work on the machine to be closed, which in the past seven months has had around £750,000 spent on it. Mill bosses have spent the last year or so looking at alternative options for the machine, which is more than 30 years old. But with production running only two weeks out of three for the past three or four months, its future was inevitably in question. And although the paper market is notoriously uncertain, the fall in demand for the machine's products, coupled with the significant rise in energy prices, is said to have affected dramatically the mill's cost base and, therefore, its profitability. Mr Foulds said annual energy costs had doubled in the last three years alone, jumping from £4.5m in 2002-03 to £9m today. "It is impossible to pass these costs on to our customers because they will just go elsewhere. "We have explored all the options for returning the machine earmarked for closure to profitability and I greatly appreciate the efforts everyone at the mill has made to improve its performance. "Regrettably, in view of the difficult market conditions and higher costs, we see no alternative to this proposal to close it. "We have to concentrate our activities on the more profitable products and our most efficient machine." The job losses come just a year after the Free Press revealed the mill had clinched a £5 million diversification deal to produce plasterboard, which it was hoped would herald a more secure future for the workforce. Mr Foulds said work to upgrade the print machine - soon to be the only one - to produce grey plasterboard for the house building industry had just finished and trials would begin soon with manufacture of the new product unaffected by the job losses. Paper has been produced on the site of the mill since the mid 1850s and today Wansbrough is chiefly involved in the manufacture of corrugated case materials, brown envelope paper and core board, which is used in products ranging from toilet rolls to clingfilm, and has customers across the UK and Europe.