Nissan announced a significant restructuring move as part of its efforts to counteract declining sales and high restructuring expenses. The automaker plans to cut about 15% of its global workforce, translating to the elimination of approximately 20,000 jobs worldwide. This announcement came on the heels of the company reporting financial losses for the fiscal year that ended, primarily attributed to dwindling car sales in important markets like China and the subsequent financial implications.
The Japanese automaker outlined a strategic intention to streamline its manufacturing capabilities. This includes reducing its number of automotive plants from 17 down to 10 as a part of its strategic recovery strategy. This initiative aims to bolster performance by creating a more agile and responsive business model capable of adapting to volatile market dynamics. While specific plants slated for closure were not identified, it is confirmed that the shutdowns will involve some facilities located in Japan.
Ivan Espinosa, Nissanโs Chief Executive, addressed the formidable challenges ahead, underscoring the demanding journey that requires both discipline and collaborative efforts. โStarting today, we build the future for Nissan,โ he assured.
The decision to downsize follows the prior yearโs announcement that already proposed cutting 9,000 positions. Additionally, Nissan reversed its prior decision to construct a battery factory in Japan. Espinosa attributed these strategic decisions to a comprehensive operational review process, driven by aligning production capabilities with market demand and enhancing strategic partnerships, such as those with Renault SA in Europe and Dongfeng Nissan in China.
Complicating these efforts, Nissan acknowledged that tariffs on auto imports imposed by U.S. President Donald Trump adversely affected its financial outcomes.
The fiscal results highlighted a stark contrast to profitability from previous years, revealing a 670.9 billion yen ($4.5 billion) loss. The final quarter figures were even bleaker, reporting a 676 billion yen ($4.6 billion) deficit, while the company outlined plans to slash 500 billion yen ($3.4 billion) in costs as part of their overarching recovery plan.
Espinosa emphasized a cautious but opportunistic approach, stating that Nissan would actively reassess targets and explore all avenues for ensuring a resilient turnaround. โAll employees are committed to working together as a team to implement this plan, with the goal of returning to profitability by the fiscal year 2026,โ he declared.
However, Jeremie Papin, Nissanโs Chief Financial Officer, acknowledged persistent and significant challenges confronting the automaker, as Nissan refrained from projecting profitable outcomes for the fiscal year set to conclude in 2026, amid ongoing uncertainties.