Nissan to cut 9,000 jobs globally as CEO acknowledges 'sales plan was overstretched' amid 94% income drop
Nissan Motor Corp., Japan¡¯s third-largest automobile manufacturer, has unveiled a major restructuring plan aimed at regaining market share in the fast-growing electric and hybrid vehicle sectors. The company will cut 9,000 jobs and reduce its production capacity by 20%. With Nissan having multiple offices in India, including a corporate headquarters in Gurugram and a manufacturing plant and R&D center in Chennai, this decision is expected to impact workers in India as well.
The new direction includes a decision by CEO Makoto Uchida to take a 50% pay cut as part of the company¡¯s cost-cutting efforts.?
These drastic changes come after Nissan¡¯s net income fell a staggering 94% in the first half of the year, highlighting the pressure it faces.?
The automaker is planning to sell a portion of its stake in Mitsubishi Motors Corp. as well, after depleting ?448.3 billion ($2.9 billion) in cash during the last six months.?
Nissan has also lowered its revenue forecast by more than 9%, signalling near-zero growth for the year ahead.
In a statement, CEO Makoto Uchida emphasised that the restructuring is not an indication of the company shrinking.?
Despite these setbacks, Uchida insists the company's efforts are focused on growth, not downsizing. "These turnaround measures do not imply that the company is shrinking," he stated, adding that Nissan is working to become leaner, more resilient, and better able to respond to changing market conditions.?
He emphasised that enhancing the competitiveness of Nissan¡¯s products is vital to its recovery.
Nissan¡¯s difficulties stem from both external pressures and internal missteps.?
The company has struggled to keep pace with changing consumer preferences, especially in key markets like China and the U.S.?
In China, domestic brands like BYD have surged ahead in the electric vehicle (EV) sector, while in the U.S., hybrid vehicles are becoming increasingly popular, benefitting competitors such as Toyota.?
Uchida acknowledged these struggles, stating, "We cannot deny that our sales plan was overstretched."
To recover, Nissan plans to invest heavily in its EV offerings, particularly in China, and expand its hybrid vehicle options in the U.S.?
The company is also looking to reduce costs and streamline production through partnerships, including its recent collaboration with Honda.?
These steps aim to boost Nissan¡¯s competitiveness in a market that is undergoing rapid and transformative change. However, with the landscape shifting quickly, Nissan¡¯s ability to regain its footing remains uncertain.
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