Nissan plans to cut 10,000 more jobs worldwide, Japanese media reported on Monday, a day before the struggling carmaker was expected to report a record annual loss of around $5 billion.
Public broadcaster NHK said the decision, in addition to a November announcement that it would slash 9,000 positions, means Nissan is now aiming to reduce its total workforce by approximately 15 percent.
Nissan, whose mooted merger with Honda collapsed earlier this year, declined to comment on the reports which also appeared in the Nikkei business daily.
The company — one of the top 10 automakers by unit sales — is heavily indebted and engaged in an expensive business restructuring plan.
Like many peers, Nissan is finding it difficult to compete against home-grown electric vehicle brands in China, while its profits are now under further threat from US trade tariffs.
The possible merger with Japanese rival Honda had been seen as a potential lifeline.
But talks crashed in February after Honda proposed making Nissan a subsidiary instead of integrating under a holding firm.
Then last month Nissan issued a stark profit warning, saying it expects an annual net loss of 700-750 billion yen ($4.8-$5.1 billion) for the 2024-25 financial year.
Its previous worst full-year net loss was 684 billion yen in 1999-2000, during a financial crisis that birthed its rocky partnership with French automaker Renault.
Nissan has since faced more speed bumps — including the 2018 arrest of former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box.
The automaker, whose shares have tanked nearly 40 percent over the past year, appointed a new CEO in March.
Ratings agencies have downgraded the firm to junk, with Moody’s citing its “weak profitability” and “ageing model portfolio”.
And this month Nissan shelved plans, only recently agreed, to build a $1-billion battery plant in southern Japan owing to the tough “business environment”.
Tariffs threat
An additional headwind is the 25-percent tariff imposed by President Donald Trump on all imported vehicles into the United States.
Of all Japan’s major automakers, Nissan is likely to be the most severely impacted, Bloomberg Intelligence analyst Tatsuo Yoshida told AFP.
Its clientele has historically been more price-sensitive than that of its rivals, he said.
So the company “can’t pass the costs on consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units”, he added.
While Nissan’s lacklustre electric car roster has failed to win over the Chinese market, the company recently announced investments to the tune of 10 billion yuan ($1.4 billion) in the world’s second-largest economy.
China’s highly competitive EV market is the largest in the world, led by Shenzhen-based carmaker BYD.
One potential solution for Nissan could be Taiwanese electronics behemoth Hon Hai, better known as Foxconn, which assembles iPhones and is expanding into cars.
Foxconn said in February it was open to buying Renault’s stake in Nissan, and this month it agreed in principle to develop and supply an EV model to Mitsubishi Motors, an alliance partner of Renault and Nissan.
External help, Yoshida said, is “very much needed” for Nissan, which can no longer differentiate itself from its rivals by making internal efforts to save costs alone.
This story was originally featured on Fortune.com
