Nissan To Cut 12,500 Jobs Around The World Due to Bad Sales

Nissan Motor Co (7201.T) unveiled its biggest restructuring plan in a decade, axing nearly a tenth of its workforce and flagging possible plant closures to rein in costs that ballooned when Carlos Ghosn was CEO.

The cuts announced on Thursday followed a collapse in Nissan’s quarterly profit, highlighting how a crisis – brought about by sluggish sales and rising costs – is deepening at Japan’s No. 2 automaker in the wake of a financial misconduct scandal over Ghosn. Ghosn has denied the charges.

The dismal quarter will pile pressure on Chief Executive Hiroto Saikawa, who has been tasked with shoring up the automaker’s performance at a time when the industry is struggling worldwide.

China’s slowing economy, further depressed by a trade war with the United States, has hit demand, even as American consumer confidence has faltered.

Tougher emission regulation has taken as toll on diesel-car sales in Europe, and an increase in electric vehicle sales and ride-sharing has worsened a drop in sales at the world’s biggest car makers.

Ford Motor Co (F.N), the second-largest U.S. automaker, is also cutting 12,000 jobs and closing plants, while Daimler (DAIGn.DE), Aston Martin (AML.L) and supplier Continental (CONG.DE) warned on profits this week.

Nissan will reduce at least 12,500 positions globally by March 2023 – its deepest job cuts since 2009 – and slash production capacity, mainly of compact cars at underutilized plants abroad. The move will shrink its product line-up by about 10%, Saikawa said,

The maker of the Rogue SUV crossover and the tiny, low-cost Datsun Redi-Go, had 138,000 employees as of March 2018.

“We are mainly targeting sites where we made investments to produce compact cars under the Power 88 plan,” Saikawa told reporters at a briefing at Nissan headquarters, referring to an aggressive growth strategy spearheaded by Ghosn in 2011 to grab 8% global market share and an 8% operating margin.

Saikawa said a total of 14 facilities would be affected.

Nissan’s job cuts expand on redundancies initially announced in May, which affected eight facilities including in Spain – where trucks and vans are made – and Indonesia, where the March subcompact hatchback and Datsun models are manufactured.

Nissan also produces compact car models at facilities including in Mexico, Russia, France, and Thailand.

– Reuters