Nissan Announces 9,000 Job Cuts Amidst Sales Slump
Japanese car manufacturer Nissan announced a significant restructuring on Thursday, revealing plans to cut 9,000 jobs globally and slash its annual sales forecast. The drastic measures, the company stated, are a direct response to a "severe situation" impacting its financial performance.
The announcement follows a disastrous first half of the fiscal year, with net profit plummeting by 93 percent to just ¥19.2 billion (£115 million). CEO Makoto Uchida attributed the significant downturn to weak sales in the crucial North American market, a region where Nissan's core models are underperforming. He highlighted the challenges posed by the rising dominance of Chinese electric vehicle (EV) manufacturers, further exacerbating the pressure on Nissan and its domestic competitors in the Chinese market.
To address the crisis, Nissan outlined a comprehensive turnaround plan. This includes a 20 percent reduction in global production capacity, alongside the 9,000 job cuts. The company also announced a revised sales forecast of ¥12.7 trillion (£76 billion), down from the previously projected ¥14 trillion (£84 billion). While a net profit forecast was not issued, having been downgraded in July to ¥300 billion (£1.8 billion), Uchida acknowledged the ongoing assessment of costs associated with the restructuring efforts.
Uchida also announced personal financial sacrifices, voluntarily forfeiting 50 percent of his monthly salary from November 2024. Other executive committee members will also face corresponding pay reductions. Further cost-cutting measures include a reduction in Nissan's stake in Mitsubishi Motors, selling shares back to the company to lower its holding from 34 percent to approximately 24 percent. Uchida emphasised that despite the reduced stake, Nissan intends to maintain close ties with Mitsubishi.
The restructuring comes at a time of significant upheaval for Nissan, following the tumultuous events of the past decade. The 2018 arrest of former CEO Carlos Ghosn, who subsequently fled Japan and remains an international fugitive in Lebanon, cast a long shadow over the company. Ghosn denies the allegations against him, claiming he fled to avoid an unfair trial.
While acknowledging the uncertainties arising from the recent US presidential election results, particularly regarding potential tariff implications, Uchida confirmed that Nissan will continue lobbying efforts while carefully monitoring the evolving situation. The companyâs medium- to long-term plans, however, are expected to remain largely unchanged.
In conclusion, Nissan's dramatic restructuring signals a concerted effort to navigate a challenging period. The significant job cuts and revised sales forecasts underscore the gravity of the situation. The success of this turnaround strategy will depend heavily on improving performance in key markets like North America, adapting to the competitive landscape of the EV sector, and effectively managing the considerable costs associated with restructuring. The coming months will be critical in determining whether Nissan can successfully navigate this difficult period and restore its profitability.
