Nissan has revealed plans to eliminate 9,000 jobs and has downgraded its annual sales forecast due to a severe drop in net profit, attributed mainly to weak North American sales. The company will reduce global production capacity by 20%, and CEO Makoto Uchida will forfeit part of his compensation. Additionally, Nissan plans to decrease its stake in Mitsubishi Motors while striving to adapt to rapid changes in the automotive market.
On November 7, 2024, Nissan Motor Co. announced significant restructuring measures, which include a reduction of its workforce by 9,000 employees and a downward revision of its annual sales forecast. The automaker reported a staggering 93% drop in net profit in the first half of the fiscal year, with weak sales in the North American market identified as a contributing factor. CEO Makoto Uchida stated that the company is adopting urgent measures to enhance its operational efficiency and meet the rapidly changing market demands. As part of this initiative, Nissan will reduce its global production capacity by 20% and have executive personnel, including Uchida, forgo a portion of their compensation. The company now anticipates net sales of 12.7 trillion yen (approximately $80 billion), a decrease from its earlier estimate of 14 trillion yen. Furthermore, Nissan is planning to decrease its stake in Mitsubishi Motors to approximately 24% from 34%, while maintaining a strong partnership with the firm. The company faces challenges not only from domestic rivals but also from burgeoning electric vehicle manufacturers in China. Uchida remarked that plans for cost assessments and branding efforts in the North American market are underway as the company aims for a turnaround. The announcement follows over a decade of upheavals within Nissan, including the controversial departure of former CEO Carlos Ghosn.
Nissan’s recent decision to cut jobs and reduce production comes in response to a dramatic decline in profitability and market competitiveness, particularly in the North American market. The automaker has been under significant pressure due to the accelerated growth of electric vehicle companies and shifting consumer preferences. Therefore, the measures announced are aimed at stabilizing the company against a backdrop of challenging market conditions and previous corporate controversies. The announcement reflects broader trends in the automotive industry, where companies are increasingly compelled to adapt rapidly to environmental and economic changes, as well as competitive pressures from new entrants in the market.
In summary, Nissan’s announcement of 9,000 job cuts and a lowered sales forecast highlights the urgent measures the company is taking to address severe financial challenges. As CEO Makoto Uchida outlined, these steps are necessary to rebuild the brand and enhance operational resilience amid escalating competition and shifting market dynamics. The company’s focus on reducing production capacity and simplifying operations underscores a critical transition period within Nissan, aiming for a more sustainable business future amidst fierce competition.
Original Source: jordantimes.com
