Nissan is set to implement a significant restructuring plan, announcing over 10,000 additional job cuts globally. This decision escalates the total reductions to approximately 20,000, representing about 15% of its workforce.
The automaker grapples with a projected record net loss exceeding $5 billion, primarily attributed to impairment charges and declining sales in key markets such as the U.S. and China. The company’s operating profit plummeted by nearly 90%, prompting urgent cost-saving measures.
Nissan aims to achieve savings of around 400 billion yen, equivalent to approximately $2.6 billion, through various strategies, including executive pay reductions. The impact of U.S. tariffs has further strained Nissan's financial performance, coinciding with a notable drop in consumer interest in vehicles.
In response to these challenges, Nissan plans to close seven out of its 17 plants by 2027, alongside a substantial reduction in production capacity. This move reflects a desperate attempt to stabilize the company following a tumultuous year marked by weakening sales and collapsed merger discussions with Honda.
New CEO Ivan Espinosa faces the daunting task of revitalizing Nissan's brand value while prioritizing profitability over volume. As the automotive industry navigates an increasingly competitive landscape, particularly from emerging electric vehicle manufacturers, Nissan's bold steps may determine its future viability.
