Nissan Announces Major Job Cuts and Production Reductions Amid Financial Losses

 

Nissan has revealed plans to cut 9,000 jobs from its global workforce as part of a series of "urgent measures" aimed at reversing financial losses. The Japanese automaker also announced it would reduce its global production capacity by 20% and slash its sales budgets after reporting a significant loss in the third quarter of the year.

The company, which employs around 130,000 people worldwide, posted a loss of 9 billion yen (£45 million) for the three months ending in September, a stark contrast to a profit of 191 billion yen during the same period last year. As a result, Nissan has revised its sales and profit forecast downward for the second time this year.

Nissan’s financial troubles stem from a combination of factors, including falling demand for vehicles in key markets, rising costs in sales and production, and an excess of unsold vehicles, particularly in the US. The company has struggled with intense competition from Chinese electric vehicle manufacturers, and higher production costs have further strained its bottom line.

Makoto Uchida, Nissan’s CEO, acknowledged the company’s failure to anticipate the rapid growth in demand for hybrid vehicles, particularly in the US. Hybrid electric vehicles (HEVs), which combine internal combustion engines with small batteries, have gained traction due to rising fuel prices. Uchida admitted that Nissan did not fully recognize this trend until late in the previous fiscal year.

In response to the company’s financial struggles, Uchida announced he would forfeit half of his monthly salary starting in November. Despite the job cuts and production reductions, Nissan's UK factory in Sunderland, which is the largest car manufacturing facility in the UK, is unlikely to be impacted. The Sunderland plant has the capacity to produce 600,000 cars annually, though it only produced 325,000 vehicles in 2023. Sources close to the situation have indicated that the UK facility is expected to remain unaffected by the upcoming changes.

Nissan has declined to specify which parts of its global operations will be most affected by the job cuts and production reductions. However, the company’s ongoing efforts to return to profitability are focused on ensuring sustainable sales at a level of around 3.5 million cars per year—just above the 3.4 million cars it sold in the previous fiscal year.