Nissan set to cut nearly 20,000 jobs globally

Nissan is set to cut nearly 20,000 jobs globally as it struggles to recover its financial stability. The Japanese car manufacturer plans to eliminate an additional 11,000 positions, adding to the 9,000 job cuts previously announced.

These reductions represent approximately 15% of Nissan’s total workforce, highlighting the severity of the crisis the company faces.

Nissan has been grappling with substantial losses and intense competition, particularly in the once-profitable Chinese market. The company is also seeking a new industrial partner following the scaling back of its alliance with Renault and the collapse of a proposed merger with Honda in February.

The job cuts are expected to affect thousands of workers, including around 6,000 at Nissan’s Sunderland plant. The company’s difficulties became apparent in November when it reported a 70% drop in profits and warned of necessary reductions in jobs and production.

A key factor contributing to Nissan’s struggles is its significant decline in market share in China, where sales have more than halved in the past four years. Nissan and other Japanese automakers have been slow in developing electric models in China, leaving them at a disadvantage compared to manufacturers like BYD, Chery, and Geely, which have gained popularity with their electric and hybrid vehicles.

Nissan’s new boss in China, Stephen Ma, acknowledged that the company was too slow to adapt to the changing market. Automotive analyst Felipe Munoz noted that Nissan is facing challenges in nearly every major market, with increasing competition from Chinese companies in regions like Southeast Asia.

Compounding these issues, Nissan has also struggled in North America by failing to anticipate the resurgence in demand for hybrid cars, missing out on a sales surge experienced by competitors like Toyota. The company’s lack of hybrid options in US dealerships has led to increased inventories and a reliance on discounting.

Amid these challenges, Nissan is expected to report substantial losses for the 2024-25 financial year, with figures projected to reach between ¥700bn and ¥750bn, significantly higher than the previously forecasted ¥80bn.