Nissan unveiled sweeping new cost cuts Tuesday, saying it would eliminate 11,000 more jobs and scale back production, capping a tumultuous year that has left the Japanese automaker fighting to turn itself around.
The new layoffs will bring Nissan’s total workforce reduction to around 20,000 jobs, after it previously announced plans to cut 9,000 positions.
Nissan saw its profit almost wiped out in the financial year just ended. Operating profit totaled 69.8 billion yen ($472 million) in the 12 months to March, a decline of 88% from the previous year.
Nissan has been badly damaged by weakening sales in the United States and China, then saw merger talks with Honda (HMC) collapse and was recently forced to replace its chief executive. Like rivals, it is also being squeezed by US tariffs and threatened by fast-rising Chinese electric vehicle makers in markets in Southeast Asia and elsewhere.
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New CEO Ivan Espinosa now faces the difficult job of turning around an automaker that has seen its once-mighty brand value eroded.
The results were a “wake-up call,” he said at a press conference. Still, a sudden turnaround seems unlikely – the automaker expects a 200 billion yen operating loss in the first quarter, CFO Jeremie Papin said.
Analysts have said Nissan is now paying the price for years under former Chairman Carlos Ghosn when it focused too heavily on sales volume and used heavy discounts to keep cars moving off lots. That has left it with an aging line-up that it is now scrambling to update.
Espinosa said Nissan must prioritize self-improvement with greater urgency and speed, and aim for profitability by relying less on volume.
It is aiming for total cost savings of 500 billion yen versus the 2024 financial year. This will see it cut the number of its production plants to 10 from 17 and reduce the complexity of parts by 70%.