Nissan cuts 9,000 jobs, slashes production to stay competitive
Nissan, the third-largest car manufacturer in Japan, announced on Thursday a reduction in employment, as well as a decrease in its global production capacity. The CEO acknowledged that the company, which employs about 133,500 people worldwide, made a strategic error and has resigned from part of his salary.
5:33 PM EST, November 7, 2024
The Japanese corporation is facing challenges for several reasons, including its misjudgment of the growth in demand for hybrids in the United States. Unlike Toyota, which is benefiting from this trend, the Yokohama-based company is not doing as well. Additionally, Nissan's financial situation is affected by the dominance of the Chinese company BYD in the Chinese market.
On Thursday, November 7, Makoto Uchida, the CEO of the Japanese corporation, acknowledged the mistake made in forecasting the growth in popularity of electric-gasoline vehicles.
— We did start to understand this trend towards the end of last fiscal year — stated the head of Nissan Motor, as quoted by Reuters. And this will have painful consequences for some employees.
Nissan's CEO resigns part of his salary
Uchida announced the dismissal of 9,000 people, which is 6.7 percent of the 133,500 employees worldwide. He also will "voluntarily" face consequences. Starting this month, he will receive half of his salary. Other members of the executive committee, as reported by Reuters, have also decided to reduce their salaries.
This is not the end. Nissan announced that it will reduce global production capacity by 20 percent. In return, the corporation plans to move forward and shorten the development time for new projects to 30 months.
The company is undergoing restructuring to lower costs by 2.6 billion dollars. Nissan also aims to sell up to 10 percent of its shares in Mitsubishi Motors to gain 445.45 million dollars.
Global sales of Nissan fell by 3.8 percent to 1.59 million vehicles in the first half of the fiscal year, mainly due to a 14.3 percent decline in China. Sales in the USA dropped by nearly 3 percent to about 449,000 vehicles. Together, both markets account for nearly half of Nissan's global sales, reports Reuters.
