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AUTO manufacturing giant Nissan has announced global job cuts as the company struggles financially to turn a profit.
The Japanese automaker announced on Thursday that it will slash 9,000 jobs, or 6% of its workforce, and cut global production capacity by 20%.
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Nissan President and CEO Makoto Uchida also voluntarily took a 50% pay cut to take responsibility for the dismal Q3 results.
Uchida did not specify what regions will be affected by the cuts.
“These turnaround measures do not imply that the company is shrinking,” Uchida said in a statement.
“Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment.
Read more in The U.S. Sun
“We [can] aim to enhance the competitiveness of our products, which are fundamental to our success, and set Nissan back on a path of growth.
“As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans.”
To combat the financial decline, Nissan will reduce its fixed costs by more than $1.9 billion and variable costs by $649 million as it maintains free cash flow.
The company’s global sales fell 3.8% to 1.59 vehicles for the first half of the financial year.
The drop was largely due to a 14.3% drop in China, where it has been looking to spark a comeback in the face of local rivals.
In the West, Nissan’s sales in the United States fell almost 3% to about 449,000 vehicles.
The United States and China account for almost half of Nissan’s global sales by volume.
However, Nissan’s models did not sell well in the United States, a lucrative auto market dominated by Ford, Toyota, and Tesla.
Uchida said the company was surprised by the rapid growth in demand for hybrids in the United States.
He admitted that Nissan did not have the hybrid and plug-in hybrid line-up it needed to compete in the market.
Between April and September, Nissan’s profits totaled $124 million, down drastically from $1.9 billion over six months last year.
Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment.
CEO Makoto Uchida
The company also lowered its sales revenue forecast for the fiscal year through March 2025 to $82 billion from an earlier projection of $91 billion.
Nissan said it plans to advance the introduction of new energy vehicles in China and plug-in hybrids and e-POWER cars in the US.
Meanwhile, Honda Motor also reported a 15% drop in second-quarter operating profits.
