Swedish automaker Volvo AB has announced job cuts affecting around 1400 workers at its plants in Belgium and Sweden in the wake of declining demand in European markets.

On Tuesday, Volvo officials revealed that the company intends to cut costs by laying off about 1400 of its workers at several manufacturing plants in Europe. The cutbacks would take place at Ghent in Belgian as well as in Gothenburg and Umea in Sweden. The Belgian plant would lay off around 400 workers while the two Swedish plants are expected to lose 610 and 370 workers respectively.

Volvo claimed that besides restructuring of its workforce, it would draw up other cost-cutting measures in order to reduce the losses incurred from falling sales of its vehicles as well as rise in the prices if raw materials. Volvo AB is primarily a maker of trucks and buses and is a popular choice in the European auto market. However reduced demand of its vehicles in recent times has had a serious impact on its growth rates. Moreover the crisis in the global financial market means that buyers are less able to get credit for buying large vehicles like trucks and buses. Finally the rising gasoline prices have made consumers wary of going for large vehicles which are comparatively less fuel-efficient.