Nissan has announced that it will be cutting 12,500 jobs globally as part of a massive restructuring process. This is higher than the initial estimate suggested earlier this week, when it was reported that the automaker was set to axe 10,000 jobs. The move will see the company reducing its overall global workforce of 139,000 by around 9%.
This follows on a massive drop in profits, with the company reporting that its first-quarter operating profit plunged 94.5% to 1.6 billion yen (RM60.5 million). It said that the increasing price of raw materials, currency swings and spending to meet regulatory requirements pushed up costs.
Besides the job cuts, the company is also slashing production, the culling being mostly of compact cars – and Datsun models – at underutilised plants abroad, Reuters reports. According to CEO Hiroko Saikawa, the automaker’s product line-up will be reduced by about 10%, and 14 of its facilities worldwide will be affected by the reduction plans. Production is also set to be reduced by 10% into 2023.
“We are mainly targeting sites where we made investments to produce compact cars under the Power 88 plan,” Saikawa told reporters during the company’s announcement of its first quarter 2019 results. The Power 88 plan was announced in 2011 and was intended to accelerate the company’s growth worldwide by expanding product segments and increasing brand presence in markets such as Russia and India.
No less than 51 new car models were slated to be launched under the plan, which involved broadening the global model lineup through more offerings based on its V-platform.
In May, the company had announced cuts and a scaling back in production for eight facilities, including in Spain and Indonesia, where the March hatchback and Datsun models are assembled. The automaker also produces compact car models in its plants in Mexico, Russia, France and Thailand, but there was no specific mention of locations or the scale of reduction involved.
Nissan has been losing traction in key markets, especially in the United States. The company saw its global vehicle sales fall 4.4% to 5.52 million units in fiscal 2018, the contributors to the plunge including a 9.3% decline in the US market and a 14.9% drop in Europe.
The automaker has also been struggling to repair the relationship with alliance partner Renault following the fallout from the failed merger with Fiat Chrysler Automobiles. Undercurrents continue to be present within the union, and the Carlos Ghosn affair hasn’t helped the cause either.
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Well.. lets collect Nissan shares.
The problem isnt production, the problem is sales arent doing their jobs but production workers must suffer.
Both Nissan and MAS needed antidotes, urgent.
Good riddance to our resident troller. I hope he learns his lesson that negativity doesn’t sell cars.
Could this be the downward slide for Nissan that would lead to another bankruptcy?
Likely. This time better Nissan close shop and no one come to rescue again. The way they treat their saviours is shocking and showed us the true nature of Japanese business culture. Their legacy should be buried and their tombstone engraved a warning for those looking to work with Japanese companies, to be very careful and always constantly watch their backs.
Karma for backstabbing Carlos Ghosn.
Reminds me when DRB backstab Syed Zainal Abidin and Dany Bahar. Didn’t end well.
Same scenario. Ford dumped by Mazda & volvo.
agree.. ford messed up volvo and mazda.. the 2 companies today are flying high without ford.
Well, I guess people who throwed out Ghosen are getting their turn very soon
Im not surprised Nissan is suffering sales problems. At one stage we looked at the new Serena to work as a family carrier and neither the car and especially the sales agents, couldn’t satisfy our minimum safety requirements. Their reputation as a global brand has also suffered enormously by the way the company treated Carlos Ghosn with little or no regard as to how the rest of the world outside Japan would view proceedings. This one affair has done imeasurable damage to the global brand of Nissan and that always reduces sales and profits.
Nissan owner dh hapgred P1.
With their cruel and unethical business practices exposed in the way they treated Ghosn, I’d say IT SERVES THEM RIGHT!
Talk about shooting yourself in the foot….hahaha
Providence!!
There’s a god after all. Karmic payback time.
Nissan should stop big time advertising such as in the European Championd League and focus on producing attractive family cars. They failed, others doing great.