Nissan's Bumpy Road: Billion-Dollar Losses and a Workforce Reduction
Nissan Shuts Down Production Sites, Eliminates 20,000 Positions
Nissan's ride hasn't been smooth sailing lately. The Japanese automaker is in the red, reporting a billion-dollar loss for its fiscal year that ended in March. Desperate times call for drastic measures, which is why the company has decided to shed 15% of its global workforce and close seven of its 17 plants.
The axe is set to fall on 20,000 employees, up from the initial 9,000 announced earlier. This workforce reduction is expected to be completed by 2027. Nissan has been on a tumultuous journey, grappling with one crisis after another.
A Struggle to Keep Up with EV Giants and Trump Tariffs
Nissan finds itself in a tough spot, battling Chinese electric vehicle titans and American trade policies. The company's efforts to merge with Honda fell flat earlier this year. Its stock nose-dived, losing around 40% of its value over the past year. The merger collapse and Trump's tariffs have prevented Nissan from providing a business outlook for the fiscal year commencing in April.
Analysts suggest Nissan is feeling the brunt of US tariffs more than its Japanese counterparts. The company's price-sensitive clientele can't absorb these increased costs as easily as Toyota or Honda's customers.
The Bite of Tariffs and The Sting of Market Dominance
- Trade War Woes: Trump's trade policies have added to Nissan's financial troubles. The erratic nature of these policies has hindered the company's ability to forecast its performance for the current fiscal year[1][2].
- China's Electrifying Domination: Nissan is battling fiercely with Chinese EV manufacturers in China's market. Delayed model launches and reduced sales have contributed to Nissan's financial struggles[1][2].
The Road to Recovery: Cuts and Cost-Cutting Measures
Nissan's losses amounted to approximately ¥671 billion for the fiscal year ended March 2025, a significant drop from its ¥427 billion profit in the previous year[1]. In response, the company has announced aggressive restructuring measures, including reducing production facilities from 17 to 10 by March 2027 and slashing 20,000 jobs. Additional job cuts totaling 10,000 might also be on the horizon[2].
[1] NTV.de, AFP[2] Bloomberg Intelligence[3] JOC.com, Reuters, Bloomberg
Sources: ntv.de, jog/AFP, Bloomberg Intelligence, JOC.com, Reuters, Bloomberg
- The community policy within Nissan needs to address the workforce reduction, as 20,000 jobs are set to be eliminated by 2027, a significant increase from the initial 9,000 announced earlier [1].
- In order to cope with financial difficulties, Nissan's employment policy is undergoing drastic changes, including plant closures and job cuts, in an effort to stabilize the company's financial standing and maintain competitiveness in the automotive industry [2].
[1] Source: Bloomberg Intelligence[2] Source: JOC.com, Reuters, Bloomberg
