Nissan Motor Corp is slashing about 15% of its global workforce—around 20,000 employees—and cutting its number of auto plants from 17 to 10, as the Japanese automaker reported a 670.9 billion yen ($4.5 billion) loss for the fiscal year ending in March. The sharp downturn comes amid falling vehicle sales in China and other key markets.
The Yokohama-based company outlined the sweeping cuts as part of a broader recovery plan designed to carry out what it called “decisive and bold actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes.”
The company also cited US tariffs on auto imports under President Donald Trump as a factor that hurt its performance, according to news agency AP.
Nissan is targeting a cost reduction of 250 billion yen ($1.7 billion) during the next fiscal year, compared to its results from the year that just ended.
The 2024 fiscal year loss marks a dramatic reversal from the previous year, when Nissan posted a 426.6 billion yen profit. Restructuring expenses also weighed heavily on its bottom line.
Chief Financial Officer Jeremie Papin told reporters the automaker faces serious challenges in achieving a turnaround, but stressed it has enough financial resources to carry it through. “We have enough cash to do so,” he said.
Nissan is expected to be the hardest hit by the 25% U.S. import tariff. “Its clientele has historically been more price-sensitive than that of its rivals,” Bloomberg Intelligence analyst Tatsuo Yoshida told AFP, adding that Nissan “can’t pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units.”
As part of its restructuring strategy, Nissan said it will aim to cut costs by 250 billion yen ($1.7 billion) over the next fiscal year. The company described its new direction as a move to implement “decisive and bold actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes.”
"In China, we will strengthen our market performance by unleashing multiple new-energy vehicles," Nissan added in a statement. The company, like many traditional automakers, has struggled to keep pace with the rapid rise of Chinese electric vehicle manufacturers.
Ratings agencies have downgraded Nissan to junk status, with Moody’s citing “weak profitability” and an “ageing model portfolio” as key factors. Shares in the company have plummeted nearly 40% over the past year.
Earlier this month, Nissan also scrapped plans for a $1 billion battery plant in southern Japan, citing the difficult “business environment.", as reported news agency AFP.
A potential merger with Japanese rival Honda had been viewed as a possible lifeline, but talks collapsed in February after Honda proposed turning Nissan into a subsidiary. Despite that, Chief Operating Officer Ivan Espinosa—who became CEO in March—said the company remains “open to collaborating with multiple partners,” including Honda.
Nissan has faced numerous setbacks in recent years, most notably the 2018 arrest of former chairman Carlos Ghosn on financial misconduct charges. Ghosn later escaped Japan in a dramatic and controversial fashion, reportedly hiding in an audio equipment box.
Espinosa acknowledged on Tuesday that the automaker faces serious challenges in achieving a turnaround but emphasized its financial stability: “We have enough cash to do so,” he told reporters.
The Yokohama-based company outlined the sweeping cuts as part of a broader recovery plan designed to carry out what it called “decisive and bold actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes.”
The company also cited US tariffs on auto imports under President Donald Trump as a factor that hurt its performance, according to news agency AP.
Nissan is targeting a cost reduction of 250 billion yen ($1.7 billion) during the next fiscal year, compared to its results from the year that just ended.
The 2024 fiscal year loss marks a dramatic reversal from the previous year, when Nissan posted a 426.6 billion yen profit. Restructuring expenses also weighed heavily on its bottom line.
Chief Financial Officer Jeremie Papin told reporters the automaker faces serious challenges in achieving a turnaround, but stressed it has enough financial resources to carry it through. “We have enough cash to do so,” he said.
Nissan is expected to be the hardest hit by the 25% U.S. import tariff. “Its clientele has historically been more price-sensitive than that of its rivals,” Bloomberg Intelligence analyst Tatsuo Yoshida told AFP, adding that Nissan “can’t pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units.”
As part of its restructuring strategy, Nissan said it will aim to cut costs by 250 billion yen ($1.7 billion) over the next fiscal year. The company described its new direction as a move to implement “decisive and bold actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes.”
"In China, we will strengthen our market performance by unleashing multiple new-energy vehicles," Nissan added in a statement. The company, like many traditional automakers, has struggled to keep pace with the rapid rise of Chinese electric vehicle manufacturers.
Ratings agencies have downgraded Nissan to junk status, with Moody’s citing “weak profitability” and an “ageing model portfolio” as key factors. Shares in the company have plummeted nearly 40% over the past year.
Earlier this month, Nissan also scrapped plans for a $1 billion battery plant in southern Japan, citing the difficult “business environment.", as reported news agency AFP.
A potential merger with Japanese rival Honda had been viewed as a possible lifeline, but talks collapsed in February after Honda proposed turning Nissan into a subsidiary. Despite that, Chief Operating Officer Ivan Espinosa—who became CEO in March—said the company remains “open to collaborating with multiple partners,” including Honda.
Nissan has faced numerous setbacks in recent years, most notably the 2018 arrest of former chairman Carlos Ghosn on financial misconduct charges. Ghosn later escaped Japan in a dramatic and controversial fashion, reportedly hiding in an audio equipment box.
Espinosa acknowledged on Tuesday that the automaker faces serious challenges in achieving a turnaround but emphasized its financial stability: “We have enough cash to do so,” he told reporters.
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