The Japanese automaker Nissan is cutting 20,000 jobs globally, 15% of its workforce. The company expects a net loss of 670 billion yen (over $4 billion) for the fiscal year 2024-2025. "The current business structure is unsustainable with our current revenue," said CEO Ivan Espinosa during the earnings presentation.
This restructuring follows earlier measures that saw thousands of jobs disappear and production capacity reduced by 20%. It marks the largest downsizing in over 25 years. Nissan, once a pioneer in electric vehicles, has seen its market share decline significantly in key markets like China and the US due to unappealing new models and underutilized production capacity.
In the US, sales have dropped by over 40% since 2018, partly due to delayed investments in hybrid vehicles. Nissan plans to launch its first hybrid in the US only in 2027, lagging behind competitors like Toyota and Honda. Meanwhile, in China, Nissan is losing ground to cheaper, technologically advanced electric vehicles from domestic brands.
The cost-cutting measures also affect Europe, with 6,000 jobs at risk in the UK. Supply chains may be disrupted as Nissan halts investments in parts production and closes factories. Efforts to collaborate with other automakers, including a failed merger with Honda, have not yielded results.
CEO Espinosa, who took over last month, aims to streamline decision-making and revamp Nissan's model lineup. However, without fundamental product innovation and clear market positioning, Nissan remains vulnerable to further losses.