H&M, a multinational clothing company based in Sweden, announced on Wednesday it will cut some 1,500 jobs worldwide as a result of a cost-cutting program launched following its decision to leave the Russian market.

Hennes & Mauritz AB or H&M Group thus became the first big European retailer to start layoffs as a result of softening demand since consumers cope with soaring inflation.

The move by the world's No. 2 fashion retailer comes as the surging cost of living and the blow from the Ukraine war hurt consumer spending and pressured companies across Europe and the United States to save cash.

The cuts by the company, which employs roughly 155,000 people, are part of a program launched in September according to which the Swedish giant is set to save 2 billion Swedish crowns ($189.8 million) per year.

"The program relates to administrative and overhead costs, and also entails reducing the workforce by around 1,500 positions," the company said in a statement.

The restructuring program appears at the time the clothing giant announced a sizeable drop in third-quarter profits, which was largely impacted by the company's decision to "wind down the business in Russia" following the invasion of Ukraine.

The company said the savings would start to kick in from the second half of next year, while it will take a restructuring charge of 800 million Swedish crowns ($75.80 million) in the fourth quarter.

"We are in a big transition and the whole retail industry is facing a lot of challenges," H&M's investor relations head Nils Vinge told Reuters, pointing to headwinds from the pandemic, the Ukraine war and rising input, freight and energy costs.

"It's very clear that when consumers have paid for their food ... energy, gas, and so on there is less to spend. So what is obvious is that demand for value for money increases."

The lion's part of the cuts would be made in Sweden, Vinge also said.

Company's CEO Helena Helmersson said that "The cost and efficiency program that we have initiated involves reviewing our organization and we are very mindful of the fact that colleagues will be affected by this."

In September, the Nordic retailer said it had closed just over 30 of its 172 shops in Russia.

While high-street retailers are struggling due to stiff competition from online-only brands, British fashion retailer Primark has recently announced plans to add 1,800 jobs in Spain and Britain as it benefits from shoppers trading down in price.