Nissan to cut 12,500 jobs as challenges continue – profits drop by 94.5%, production to be slashed 10%

Nissan to cut 12,500 jobs as challenges continue – profits drop by 94.5%, production to be slashed 10%

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.

Nissan to cut 12,500 jobs as challenges continue – profits drop by 94.5%, production to be slashed 10%

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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Anthony Lim

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.

 

Comments

  • Ghosn on Jul 26, 2019 at 10:10 am

    Well.. lets collect Nissan shares.

    Like or Dislike: Thumb up 6 Thumb down 0
  • Vader on Jul 26, 2019 at 10:35 am

    The problem isnt production, the problem is sales arent doing their jobs but production workers must suffer.

    Like or Dislike: Thumb up 12 Thumb down 1
  • Aura89 on Jul 26, 2019 at 11:27 am

    Good riddance to our resident troller. I hope he learns his lesson that negativity doesn’t sell cars.

    Like or Dislike: Thumb up 4 Thumb down 0
  • Could this be the downward slide for Nissan that would lead to another bankruptcy?

    Like or Dislike: Thumb up 8 Thumb down 0
    • EDITOR on Jul 26, 2019 at 12:06 pm

      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.

      Like or Dislike: Thumb up 23 Thumb down 3
  • tokmoh. on Jul 26, 2019 at 11:59 am

    Karma for backstabbing Carlos Ghosn.

    Reminds me when DRB backstab Syed Zainal Abidin and Dany Bahar. Didn’t end well.

    Like or Dislike: Thumb up 20 Thumb down 1
    • Same scenario. Ford dumped by Mazda & volvo.

      Like or Dislike: Thumb up 6 Thumb down 0
      • rally_fan (Member) on Jul 26, 2019 at 4:58 pm

        agree.. ford messed up volvo and mazda.. the 2 companies today are flying high without ford.

        Like or Dislike: Thumb up 6 Thumb down 1
    • BbalingBiru on Jul 26, 2019 at 8:49 pm

      Well, I guess people who throwed out Ghosen are getting their turn very soon

      Like or Dislike: Thumb up 3 Thumb down 0
  • Gilbert on Jul 26, 2019 at 12:28 pm

    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.

    Like or Dislike: Thumb up 11 Thumb down 0
  • alldisc on Jul 26, 2019 at 1:00 pm

    Nissan owner dh hapgred P1.

    Like or Dislike: Thumb up 7 Thumb down 1
  • DonkeyKong on Jul 26, 2019 at 5:03 pm

    With their cruel and unethical business practices exposed in the way they treated Ghosn, I’d say IT SERVES THEM RIGHT!

    Like or Dislike: Thumb up 6 Thumb down 1
  • Talk about shooting yourself in the foot….hahaha
    Providence!!

    Like or Dislike: Thumb up 3 Thumb down 1
  • Celup King on Jul 26, 2019 at 5:55 pm

    There’s a god after all. Karmic payback time.

    Like or Dislike: Thumb up 2 Thumb down 1
  • Padukon on Jul 27, 2019 at 3:13 pm

    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.

    Like or Dislike: Thumb up 0 Thumb down 0
 

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