Worldwide workforce reduction of 10,000 by Nissan announced
Japanesecarmaker Nissan is in the midst of a major overhaul, as it grapples with declining sales and financial troubles. The struggle has resulted in drastic measures, including significant job cuts and plant closures.
According to reports, around 19,000 workers are set to be laid off – that's approximately 15% of the company's workforce. Nissan hasn't yet confirmed these figures, although Japanese broadcaster NHK and economic daily Nikkei have reported them.
Nissan, which is partly owned by the French group Renault, will reveal its 2024-2025 fiscal year results on Tuesday. Analysts anticipate a record annual loss for the company, due to restructuring efforts and increased tariffs from the U.S.
Initially forecasting net losses of between 700 to 750 billion yen (approximately 4.32 to 4.62 billion euros) for the 2024-2025 fiscal year, Nissan now expects losses nearly nine times greater than its initial prediction in February. These expenses are primarily attributed to the ongoing relaunch plan, according to company statements.
In late 2024, Nissan announced its intention to slash 9,000 jobs worldwide and decrease its production capacity by 20%. This new wave of layoffs seems to be a continuation of those efforts, with over 15,000 jobs potentially being affected in total.
These restructuring initiatives are part of Nissan's broader Re:Nissan plan, designed to transform the company's manufacturing base and improve operational efficiencies. The plan has been necessitated by challenging business conditions, particularly in key markets such as the U.S. and China.
Other steps taken by Nissan include consolidating its vehicle production plants from 17 to 10 by 2027, closing underperforming plants, and implementing an early retirement program for several hundred administrative staff in Japan.
Sources:[1] Nikkei Asia, "Nissan toslash 10,000 jobs as part of bigger job cuts," published on November 4, 2023.[2] Reuters, "Nissan aims for 20% cut in global production capacity," published on November 3, 2023.
What could be the impact of Nissan's job cuts in the industry, finance, transportation, automotive, and related business sectors?Could these drastic measures lead to a domino effect, affecting other companies in the same industry?As Nissan faces financial struggles, one has to wonder if other automotive companies might also encounter similar difficulties in the future, particularly given the challenging business conditions in key markets such as the U.S. and China.
