UPDATE 1-GN Store Nord to cut costs, up to 250 jobs

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STOCKHOLM, June 17 (Reuters) - Danish hearing aid and headset maker GN Store Nord (GN.CO) said on Tuesday it would shed upto 250 jobs in a cost-cutting programme expected to generate annual savings of 150 million crowns ($31.2 million).

The company said its action was driven by tougher market conditions in its headset business. The plan will cost 200 million crowns, including 75 million already announced.

"The programme comprises a significant simplification of the entire organization, including of the supply chain, a stronger focus on selected core markets, key accounts and product segments," GN said.

GN said it expected the majority of cost savings to take effect from the end of 2008 and early 2009, adding the steps would have a limited effect on earnings before interest, tax and amortisation (EBITA) this year.

By 1200 GMT, GN shares were up 3.6 percent at 28.50 crowns, while the Copenhagen exchange top 20 index was up 2.9 percent.

GN has been struggling to turn its business around after a protracted attempt to sell its hearing aid unit to Switzerland's Sonova SOON.S for $2.8 billion was finally derailed by German competition authorities last year.

While the hearing aid arm is profitable, the headset arm does not expect to break even on EBITA until 2009. (Reporting by Kim McLaughlin; Editing by David Cowell)