Struggling Nissan Faces $7 Billion Loss, Slashes 20,000 Jobs, and Plans Plant Closures
- Facing Financial Ruin
Nissan Suffers Billions in Losses - Plant Closures Lead to Job Cuts - Nissan faces significant financial losses - announcement of factory shutdowns and job cuts made
The once-booming Japanese automaker, Nissan, is now drowning in a sea of red figures as it grapples with a colossal $7 billion loss and announces plans to axe 20,000 jobs and close plants. The company, which was already mired in a series of crises, has increased its job cuts from the initial 9,000 to a frightening 20,000. The plant closures are expected to be completed by 2027.
Over the past few years, Nissan has been stumbling from one financial disaster to another – a situation shared by other, and especially Japanese, automakers battling their way through the ever-growing dominance of Chinese electric vehicle manufacturers. The company's ambitious merger plans with rival Honda collapsed earlier this year, while its stock plummeted an astonishing 40% in value over the past 12 months.
The company has been dealt another severe blow by the tariffs imposed by the Trump Administration. These tariffs have added to the uncertainties surrounding Nissan's financial forecast for the fiscal year that began in April. CEO Iván Espinosa confessed, "The uncertainty of these US trade measures makes it incredibly hard for us to reasonably estimate our forecast for operating and net income for the full year." Espinosa acknowledged the necessity for Nissan to concentrate on its own recovery with greater urgency and speed.
Analysts have pointed out that Nissan is being hit particularly hard by US tariffs compared to other Japanese car manufacturers. The reason lies in the company's customer base, which is known to be more sensitive to price fluctuations. Tatsuo Yoshida of Bloomberg Intelligence explained, "the company simply cannot pass on additional costs to customers to the same extent as Toyota or Honda."
Like Nissan, Honda is also bracing for a substantial decline in profits due to US trade policies. Honda predicted on Tuesday a 70% drop in net profits for the current fiscal year compared to the previous year, forecasting a profit of merely 250 billion yen (1.5 billion euros) by March 2026.
Honda, Japan's second-largest automaker after Toyota, reported a net profit of an impressive 835 billion yen in the previous fiscal year. However, even that figure represented a significant decline of almost 25% compared to the prior year, and fell far short of the 950 billion yen initially predicted.
- Nissan
- Colossal Loss
- Job Cuts
- Plant Closures
- Fiscal Year
- Yen
- Trump Administration
- *Enrichment Insights:
- Nissan's financial woes stem primarily from weak sales, impairment charges, and restructuring costs rather than US tariffs.
- Nissan has reported a net loss of around $7 billion for the financial year ending March 2025, a significant decline from previous years.
- Despite relatively stable revenue, the company has experienced a substantial decrease in operating profit due to the fall in sales volumes, pricing pressure, and increased costs.
- Nissan is implementing drastic measures to overcome its financial issues, including slashing 20,000 jobs and closing plants, as part of an intense focus on recovery.
- The automaker's financial struggles are reflective of challenges faced by other businesses in the industry, notably Japanese automakers, as they navigate the competitive landscape, particularly concerning Chinese electric vehicle manufacturers and the impact of finance-related policies, such as those applied by the Trump Administration.
