- Nissan announced significant cost-cutting measures, including job cuts and reduced production capacity worldwide.
- CEO Makoto Uchida admits the company’s sales forecasts were overly ambitious and now require adjustment.
- The company aims to expand its hybrid lineup in the US and speed up development for greater flexibility.
Nissan CEO Makoto Uchida has just announced a series of sweeping changes to the company aimed at steering the company through turbulent times. The Japanese automaker will be cutting 9,000 jobs, reducing production, and offloading a significant portion of its stake in Mitsubishi. On top of that, Uchida and some other executives are taking a pay cut. Nissan appears to be in a very serious ’emergency mode,’ with all signs pointing to a period of significant restructuring and introspection.
The 9,000 job cuts represent about 6.7 percent of Nissan’s global workforce, affecting positions across multiple regions. The same is true of production capacity. Nissan will reduce global output by 20 percent as part of this restructuring. In addition, it’s selling 149,028,300 shares of Mitsubishi, a move that will reduce Nissan’s ownership stake in Mitsubishi from 34.07 percent, signaling a possible retreat from deeper alliances within the Renault-Nissan-Mitsubishi Alliance.
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Nissan expects some of the job cuts to come in the form of voluntary separation programs like buyouts. The company says it’s still going to build the 30 new or updated models included in its Arc plan but their timing might be delayed.
These decisions come in response to struggling sales and reduced profit forecasts. For the third quarter of 2024, Nissan reported a net loss of 9.3 billion yen (about $61 million at current exchange rates), a sharp reversal from the 191 billion yen ($1.25 billion) profit in the same period last year. As a result, the company has slashed its full-year revenue forecast to 12.7 trillion yen ($83 billion) and now expects to sell 3.4 million vehicles this fiscal year, down from the previous estimate of 3.7 million
“We have no choice but to partially revise the plan,” Uchida said. “It is my deepest regret to face this challenging situation in the initial year of The Arc. “I plan to take our company towards future growth. The lives of 130,000 Nissan employees and their families around the world rest on my shoulders. I feel great responsibility as a leader of the company.”
One area where Nissan has fallen behind, according to Uchida, is its hybrid offerings—particularly in the US market, where demand for these vehicles remains high. It’s working to remedy that issue and also to cut overall development time down to 30 months so that the brand can be more flexible and quick to react to market conditions.
To Uchida’s credit, he says that he and other executives are taking pay cuts. He’s personally forfeiting half of his salary starting this month. That seems reasonable given that the company now predicts that it lowered its annual profit outlook by 70 percent. It’s the second time this year Nissan lowered that guidance which now stands at 150 billion yen ($975 million).
