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Nissan aims to cut over 20,000 jobs worldwide as part of restructuring

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Nissan Motor Co is looking to cut over 20,000 jobs, about 15 percent of its global workforce, as part of a restructuring plan due to slumping sales amid the novel coronavirus pandemic, sources close to the matter said Friday.

Japan's third-largest automaker by volume is considering labor reductions in Europe and some emerging economies as well as the realignment of output bases in Japan, as it seeks to streamline production operations to restore its battered business, the sources said.

It would be Nissan's most drastic job reduction since 1999, when Carlos Ghosn, a long-time boss who was arrested by Japanese prosecutors in 2018 for alleged financial misconduct, announced his strategy to revive the automaker from the brink of bankruptcy after it and Renault SA agreed on a capital tie-up.

The global spread of the novel coronavirus has led to the suspension of Nissan's domestic and overseas plants, pressuring its sales in major markets such as North America and Europe.

Nissan's sales in the United States plummeted 29.6 percent to 257,606 vehicles in the January-March quarter from the previous year, according to data released by the company.

In Europe, Nissan's new passenger car registrations plunged 38.7 percent to 91,447 units in the four months through April from a year earlier. In April alone, they dived 86.2 percent to 4,398, worse than most of its rivals, such as Volkswagen AG and Toyota Motor Corp., amid the coronavirus pandemic, data from the European Automobile Manufacturers Association showed.

As part of a restructuring in Europe, Nissan is looking to produce Renault vehicles in a bid to boost production at the Sunderland plant in northeastern England. The plant saw its production decline about 30 percent to roughly 347,000 units in 2019 compared with 2017, the sources said.

Nissan said in July that it would cut 12,500 jobs at 14 production bases globally by March 2023 as part of a restructuring, marking a departure from Nissan's aggressive, expansive strategy under Ghosn.

Under his management, the Japanese company tried to boost its shares in the U.S. market by increasing incentives to dealers, but this resulted in denting its brand image.

It also failed to expand sales in emerging markets with products developed under the Datsun brand after burning through much of its funds and delaying the production of new competitive models.

Also, its deepening business slump amid the pandemic has pushed it to work on additional reform measures, including closing a plant in Barcelona that could lead to 3,000 jobs there being axed.

The Japanese automaker is also considering factory closures in Indonesia and some other emerging markets.

The sources said Nissan is prioritizing the U.S. and Chinese markets in its push to recover sales, with plans to reduce its business operations in Europe and emerging markets, including Southeast Asian nations, where its alliance partners Renault and Mitsubishi Motors Corp. have a strong footing.

Among Japanese manufacturers, Sony Corp and NEC Corp announced job cuts of around 16,000 and over 20,000, respectively, in the wake of the global financial crisis in 2008.

The Yokohama-headquartered automaker is scheduled to announce a new medium-term management plan, possibly including a 20 percent cut of global output capacity by fiscal 2022, when it releases its earnings results for the year ended March on Thursday.

The company has already said it expects to report a group net loss of 85 billion yen ($790 million) to 95 billion yen for fiscal 2019, its first red ink in 11 years since fiscal 2008 amid the global financial crisis. Nissan already incurred its first quarterly net loss in 11 years in the October-December period.

While the struggling automaker is now capable of producing about 7 million vehicles worldwide, its annual global sales decreased to 4.79 million units in fiscal 2019 after marking a record high of 5.79 million units in fiscal 2017.

"We also need to restructure domestic production bases to stop the bleeding," a senior Nissan official said, as the company's domestic output in fiscal 2019 fell 15.9 percent to 757,692 vehicles from a year earlier.

© KYODO

©2020 GPlusMedia Inc.

14 Comments
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due to slumping sales amid the novel coronavirus pandemic

Few years ago Nissan said it's all because Ghosn now because pandemic, next year they'll give a new excuse.

8 ( +10 / -2 )

Nissan/Tesla Joint venture.

0 ( +0 / -0 )

Nissan said in July that it would cut 12,500 jobs at 14 production bases globally by March 2023 as part of a restructuring, marking a departure from Nissan's aggressive, expansive strategy under Ghosn, who was known as le costcutter...err....

3 ( +3 / -0 )

They could start with the overpaid suits at the Yokohama Global HQ, some of their most ineffective 'staff'; and try to integrate Renault and Mitsubishi properly into their business planning and operations.

2 ( +3 / -1 )

@wajderlust

try to integrate Renault and Mitsubishi properly into their business planning and operations.

Duh, Renault owns Nissan, not the other way around.

Renault tried to merge with Nissan and Nissan's Japanese executives opposed, and this is why they plotted and staged that coup against Ghosn.

Now that the "Le Cost Killer" has fled Japan, cost is ballooning at Nissan again and on its path to bankruptcy once more.

-5 ( +0 / -5 )

They should start with management...

2 ( +2 / -0 )

With Ghosen gone, Nissan may be missing him. Nissan has very honest top management and I am sure they will do the right thing. Nissan is good people. Love them all.

-4 ( +0 / -4 )

corona virus.

yes of course.

reality is more simple.

nissan cars are not popular both in Japan and abroad.

its market economy guys.

competitors have better cars,offers,pricing,service.

this oyaji style business will go down.definitely.

1 ( +2 / -1 )

Nissan’s are overpriced!

Of course, people won’t buy them!

0 ( +1 / -1 )

This has nothing to do with the corona virus, it is clear Nissan's problems started long before the the virus, to be exact they started at around the same time Ghosn was arrested and the old guard Japanese executives took back control. perhaps Ghosn was telling the truth and he was set up by these guys that didn't like the Renault deal and opposed the next step of more international consolidation. With all the vilification of Ghosn in the Japanese media I am guessing at this point Nissan employees wouldn't mind having him back.

3 ( +4 / -1 )

NNissan was already in trouble before corona virus hit, now they have found a convenient excuse. Before corona virus, it was all Ghosn's fault. So when corona virus goes away, who will they attribute their incompetence to? They should cut at least 2,000 jobs among the dark suit wearing management at the Global HQ in MM21 Yokohama. That's where they need to start from.

1 ( +2 / -1 )

Renault owns Nissan"

No, they don't.

They're the majority shareholders with about 43.4% of the voting rights.

Majority Shareholders (SH, as taught), don't necessarily control the Board of Directors. Control of the Board is necessary to pass Resolutions and elect the Chairman, plus deciding on the casting vote if there's a deadlock, or debarred by the Articles of Association.

This is going to take long and I don;'t have time .

BLP (Businees Law & Practice) for the uninitiated is recommended).

Wiki won't help you, me thinks,

To sum up: they don't own the company, as you're constantly reminding everyone here.

0 ( +2 / -2 )

Sorry, but when I look at Nissan cars - I dont seen anything of interest. Ghosn may have helped them out of a rut, but when they focused more upon the infighting rather than the business that they were in, then they lost the lead. Nissan clearly needs a Japanese version of Steve Jobs in order to Survive... and from those Japanese "Wanabies" ... I've not seen anything that comes close to the mark - all still Old School.

Corvid-19 may lead to an opportunity of change... but change needs to start at an early age.

2 ( +2 / -0 )

@ Samit BasuMay

try to integrate Renault and Mitsubishi properly into their business planning and operations.

Nissan in Yokohama run the operations in Japan, as well as China for the 'Alliance', and try (!) to take care of Mitsubishi; the three companies business operations are very poorly consolidated, even after more than 20 years. Monolithic Japanese bank mergers did better than that.

Staff waste time and resources trying to fix problems between the three Alliance members, while the 'Suits' pretend all is OK.

0 ( +0 / -0 )

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