Nissan layoffs continue with 10,000 more jobs on the line
Nissan Motor Co. is set to cut an additional 10,000 jobs worldwide as the struggling automaker seeks to stem its deepening financial losses, bringing the total planned layoffs to 20,000, or 15 percent of its global workforce.
This decision follows the announcement in November that Nissan would slash 9,000 jobs and scale back production capacity by 20 percent.
The move comes as the company braces for a record net loss of up to 750 billion yen ($5.06 billion) for the fiscal year ending March 2025--the largest in its history.
Nissan is expected to formally announce the latest round of layoffs in the coming days.
The aggressive cost-cutting measures reflect the automaker's ongoing battle with plummeting sales and mounting structural inefficiencies.
The company said its global vehicle sales have dropped by more than 40 percent in a seven-year period, going from 5.77 million units in fiscal 2017 to an estimated 3.3 million units in fiscal 2024.
Driving the restructuring plan is Ivan Espinosa, Nissan's new president, who took the helm on April 1. After reviewing the company's revival strategy, Espinosa concluded that further downsizing was necessary to stabilize operations.
A combination of factors has eroded Nissan's profitability, including a dip in brand value and a thin product lineup in North America.
Intense price competition with local electric and plug-in hybrid vehicle manufacturers in China has also contributed to the decline.
Despite these challenges, the company maintained a production capacity for 5 million vehicles, further hurting its profits.
The crisis escalated last year when Nissan's poor financial results became evident. Its interim earnings for the first half of fiscal 2024 showed a dramatic year-on-year decline of over 90 percent in both operating profit and net income.
Hopes for a major turnaround were pinned on a proposed alliance with Honda Motor Co., including a shared holding company that would be led by a Honda-appointed CEO.
However, tensions rose over Nissan's slow pace in implementing restructuring measures, leading Honda to propose a full acquisition of Nissan. The talks ultimately collapsed in February.
(Daisuke Matsuoka also contributed to this article.)
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