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Nissan to cut 9,000 jobs globally to curb profit losses

by DD Staff

November 07, 2024

A worker at Nissan’s Sunderland factory inspects a vehicle. Photograph: Bloomberg/Getty Images

key takeaways

Makoto Uchida, Nissan’s chief executive, said he would forfeit half his monthly salary from November while making the cuts.

Nissan has said that, as part of "urgent measures" to halt declining earnings, it will eliminate 9,000 positions from its global workforce.

Following a decline to a loss in the three months leading up to the end of September, the Japanese automaker said that it will also slash its sales budgets and lower worldwide manufacturing capacity by 20%.

In addition to competing with Chinese rivals on electric vehicles in particular, automakers worldwide have been having difficulty keeping up with the declining demand for automobiles in important regions.

The news would leave the company's 130,000 employees in the dark. The Sunderland, UK facility is believed to be unaffected, though.

The company lost 9bn yen (£45m) in the quarter, compared with a 191bn yen profit in the same period last year. It also revised down its sales and profit forecast for the second time this year.

The company said it was facing a severe situation as it battled with higher costs for sales and in its factories, as well as having too many cars with dealers in the US in particular, which can force the company to give steep discounts.

Makoto Uchida, Nissan’s chief executive, said he would forfeit half his monthly salary from November while making the cuts.

He told a press conference on Thursday that the company had failed to foresee an increased demand for hybrid cars in the US in particular. Hybrids, sometimes referred to as hybrid electric vehicles (HEVs), combine an internal combustion engine with a small battery, giving a limited reduction in carbon pollution relative to traditional cars. Hybrids have gained in popularity amid high fuel prices.

“We didn’t foresee HEVs ramping up this rapidly,” he said. “We did start to understand this trend towards the end of last fiscal year.”

Nissan said it wanted to get to a point where it would be profitable if it sold 3.5m cars a year. It sold 3.4m in the year to March.

Nissan runs the UK’s biggest car factory in Sunderland, which has the capacity to build as many as 600,000 cars a year but only produced 325,000 in 2023. However, managers in the UK have indicated they do not believe the factory will be affected, according to a person briefed on the situation.

The company also has a sales operation in Hertfordshire, a technical centre in Cranfield, Bedfordshire, and a design office in London.

Nissan declined to say which parts of the business would be affected.

Source: The Guardian