Nissan to Cut 9,000 Jobs, Scale Back Production Amid Slumping Sales in China and U.S
Nissan Motor announced a dramatic cost-cutting plan for the current fiscal year, aiming to reduce expenses by 400 billion yen ($2.6 billion) in response to sluggish sales in key markets, including China and the United States. The company will cut 9,000 jobs, representing 6.7% of its global workforce, and reduce production capacity by 20%, reflecting a major downsizing effort. Nissan also lowered its annual profit forecast by 70% to 150 billion yen ($975 million), citing tough market conditions and missteps in its hybrid vehicle strategy.
Amid increasing competition from Chinese automakers like BYD in the electric and hybrid segments, Nissan has faced challenges regaining traction in the Chinese market. CEO Makoto Uchida acknowledged the company had underestimated U.S. demand for hybrid vehicles, putting it at a disadvantage against rivals such as Toyota, which has successfully captured U.S. consumers with its extensive hybrid lineup. In an effort to shore up its finances, Nissan also plans to sell up to 10% of its stake in Mitsubishi Motors, potentially raising up to 68.6 billion yen ($445.45 million).
To streamline operations further, Nissan is slashing vehicle development timelines and deepening collaborations with alliance partners Renault and Mitsubishi Motors. Executive pay cuts, including a voluntary 50% reduction by Uchida, underscore the gravity of Nissan’s situation. With global sales down 3.8% in the first half of the fiscal year, the company faces mounting pressure to adapt as it strives to regain profitability and rebuild its position in the competitive automotive market.
