TOKYO (AP) — Nissan Motor Corp. has announced a significant reduction in its global workforce, cutting approximately 15%, which equates to about 20,000 jobs. This decision comes in the wake of a reported financial loss for the fiscal year that just concluded, driven by declining vehicle sales in China and other countries, coupled with high restructuring costs.
The Japanese automaker revealed its plans to streamline operations, reducing the number of its automobile manufacturing plants from 17 to 10. This initiative forms part of what the company is calling its "recovery plan," aimed at taking "decisive and bold actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes." While Nissan did not specify which factories are to be closed, it confirmed that closures would include facilities located in Japan.
Nissan's Chief Executive Ivan Espinosa expressed the challenges ahead, remarking, "We have a mountain to climb," highlighting the difficult journey towards recovery that requires discipline and teamwork. He stated, "Starting today, we build the future for Nissan."
The layoffs, which are to be completed by March 2028, include a reduction of 9,000 positions that were previously announced. In addition, the company has decided to scrap plans for a new battery plant in Japan, further indicating significant shifts in its business strategy.
Espinosa, who took leadership earlier this year, explained that the current reduction plans stemmed from a thorough review of Nissan's operations. This analysis aims to align production with current market demand and develop strategic approaches to both market and product offerings. Furthermore, Nissan plans to strengthen its collaborations, particularly with partners such as Renault SA in Europe and Dongfeng Nissan in China.
The automaker's struggles have been exacerbated by tariffs imposed on auto imports by U.S. President Donald Trump, impacting its overall financial performance. For the fiscal year ending in March, Nissan reported a substantial loss of 670.9 billion yen (approximately $4.5 billion), a stark contrast to the profit of 426.6 billion yen recorded in the previous fiscal year.
During the final quarter through March, Nissan incurred losses totaling 676 billion yen (around $4.6 billion). The recovery plan outlined by the automaker aims to achieve a cost reduction of 500 billion yen (about $3.4 billion) relative to current expenditures.
"As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery," stated Espinosa. He emphasized that all employees are dedicated to collaborating as a team to achieve the goals outlined in the recovery plan, with an aspiration to return to profitability by the fiscal year 2026.
Nevertheless, Nissan's Chief Financial Officer Jeremie Papin acknowledged the formidable challenges ahead. The company did not provide profit projections for the fiscal year ending in March 2026, citing prevailing uncertainties impacting the automotive market.
