Nissan to lay off 10,000 more employees, total cuts to reach 20,000
Japanese automotive giant Nissan is set to lay off an additional 10,000 workers worldwide, according to a report by Japanese broadcaster NHK. This move is part of a wider restructuring effort that will see the company reduce its global workforce by approximately 20,000 employees, or around 15%, over the coming months. The new round of job cuts follows an earlier announcement in November of the previous year, where Nissan revealed that it would be shedding 9,000 jobs. While the company has not confirmed the latest figures, declining to comment when asked by Efe, the information has caused concern within the industry.
The decision to reduce the workforce comes amid significant financial troubles for Nissan. The company has faced mounting challenges over the past year, which have been exacerbated by external economic pressures. One of the key factors contributing to the company’s financial woes is the trade war between the United States and Japan, which has led to a sharp increase in tariffs. Under the administration of former US President Donald Trump, a 25% tariff was imposed on foreign vehicle imports, including those from Japan. As a result, the tariffs on Japanese vehicles entering the US now stand at a punitive 27.5%, which has heavily impacted Nissan's ability to compete in one of its most important markets.
Nissan's financial struggles have also been further complicated by production cuts, which were announced in tandem with the initial layoff plan. Last November, the company disclosed plans to cut global production by approximately 20% to offset declining demand and improve operational efficiency. These measures are part of Nissan’s broader strategy to streamline operations, with a specific focus on increasing profitability and stabilising its business amid the ongoing challenges.
The company’s troubles are not limited to external market conditions. Internally, Nissan has struggled with leadership transitions and strategic missteps in recent years. The turmoil within the company reached a peak in 2018 with the high-profile arrest of former chairman Carlos Ghosn, which disrupted Nissan's leadership structure and further undermined confidence in its long-term viability.
As part of its restructuring efforts, Nissan has already made a series of operational changes. The company has decided to cease its production in Argentina, a move that will further reduce its manufacturing footprint in South America. Additionally, Nissan has opted to consolidate its pickup truck manufacturing in Mexico to streamline operations. Another significant change involves the scrapping of plans to build a new electric vehicle battery factory in Kitakyushu, Japan. This decision reflects the company's shift in focus towards more pressing cost-cutting measures rather than long-term investments in electric vehicle infrastructure.
In terms of its financial outlook, Nissan is anticipating net losses of between 700 and 750 billion yen (approximately €4.25 to €4.56 billion) for the fiscal year that ended on March 31, 2020. These losses are largely attributed to the costs associated with the ongoing restructuring process, along with other external factors such as the escalating tariffs and the global economic slowdown.
Nissan's layoff plans and restructuring initiatives come at a critical time, as the company prepares to release its financial results for the past fiscal year. While the exact impact on the company's operations remains uncertain, the automotive industry is closely watching Nissan's efforts to recover from its financial difficulties and reinstate its position as a global leader in the sector.
As Nissan moves forward with these drastic changes, the future of the company remains uncertain, and employees, especially those affected by the layoffs, will be hoping for a swift and successful turnaround.