Saskatchewan's forestry industry has taken another big hit with the announcement Weyerhaeuser is laying off another 300 employees in the east-central part of the province.

The forestry giant gave layoff notices Monday to 183 employees at the Hudson Bay plywood mill and 116 at the Carrot River sawmill.

The shutdowns, which the company blames on unfavourable market conditions, take effect Jan. 3.

It's a tough blow for Hudson Bay, a town of 1,800, said Rick Dolezsar, the town's administrator.

"It's not just the people that work directly at the mill. It's also the whole logging industry that supplies the plant and all of the other associated service industries … fuel, trucking," he said. "It's going to be very devastating."

Meanwhile, in Carrot River, population 1,300, town councillor Scott Brownlee said rumours of a shutdown have come and gone for years. Even with the announcement, he's not willing to concede the layoffs will be permanent.

Weyerhaeuser has been trying to sell its mills in Carrot River and Hudson Bay for two years.

People in town had hoped they would stay open until they were sold, Dolezsar said.

Earlier this year, Weyerhaeuser closed its pulp and paper operations at its flagship operation in Prince Albert, resulting in the loss of about 700 jobs.

In August, another pulp and paper company, Domtar, announced a $3.3-billion US merger agreement with Weyerhaeuser's fine paper business. The companies expect to finalize the deal next year.

Because Monday's layoffs are indefinite, with no recall date, Weyerhaeuser is required under Saskatchewan's labour laws to give employees 90 days' notice.

The Carrot River operation makes softwood lumber studs, while the Hudson Bay plant makes softwood plywood sheets. Both products are used primarily in home building.

Saskatchewan Forestry Minister Eldon Lautermilch said the news is "distressing" and he's disappointed Weyerhaeuser wasn't more creative in exploring ways to keep the mills open.