Nissan to cut 9,000 jobs in a radical austerity program

Nissan is adopting a harsh cost-cutting course. Global production capacities will be reduced by 20%, and 9,000 jobs will disappear. Nissan also plans to sell about one-third of its Mitsubishi shares, representing approximately 10% of the total MMC shares.

The changes are motivated by the company’s consolidated net value decreasing by 79.1 billion yen (approx. €481 million) to 5.98 trillion yen (approx. €36 billion). The consolidated operating profit decreased by 303.8 billion yen (approx. €1.85 billion) to 32.9 billion yen (€200 million), representing an operating profit margin of just 0.5%.

Improving the cost structure with tough cuts

Japan’s second-biggest manufacturer wants to improve its cost structure to be profitable from a sales volume of just 3.5 million vehicles worldwide. The stake in Mitsubishi will be reduced by around one-third.

To realize this, Nissan has announced that it will reduce production capacity worldwide by 20% and cut 9,000 jobs globally. In addition, “various measures to lower selling, general, and administrative expenses, decrease the cost of goods sold, rationalize its asset portfolio, and prioritize capital expenditures and investments in research and development.”

With the staff reduction, Nissan aims to reduce fixed costs by 300 billion yen (€1.83 billion) and variable costs by 100 billion yen (€610 million) compared to fiscal 2024.

The Group writes that CEO Makoto Uchida will voluntarily waive 50% of his monthly compensation from November 2024. Other members of the Executive Board will follow suit.

According to Uchida, the cuts do not mean the company will shrink: “Nissan will restructure its business to become leaner and more resilient while also reorganizing management to respond quickly and flexibly to changes in the business environment.”

We aim to enhance the competitiveness of our products, which are fundamental to our success and set Nissan back on a path of growth. As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans,” he added.

Changes to the strategic plan?

Nissan had already announced its intention to change course in the spring, although less radically then. In its strategic plan ‘The Arc’, the manufacturer stated that it wanted to achieve cost parity between electric cars and combustion engines by 2030 and increase sales of electric vehicles by one million vehicles over the next three years.

Nissan plans to launch 34 new models with electric drive systems worldwide by 2030, seven more than previously foreseen. In addition, electrified cars should make up 40% of the global model mix by the 2026 financial year.

By the decade’s end, it should even be 60%, five percent more than previously planned. Nissan does not specify in its annual report whether this will remain the case or whether these target figures are already outdated.

Nissan aims to reduce vehicle development lead time to 30 months and deepen collaboration with Renault Group, Mitsubishi Motors Corporation (MMC), and Honda Motor Co., Ltd. while exploring more strategic partnerships in technology and software services.

Nissan will appoint a Chief Performance Officer responsible for sales and profit on December 1st to facilitate swift decision-making regarding the turnaround actions.

Guillaume Cartier, chairperson of the Management Committee for AMIEO (Africa, Middle East, India, Europe, and Oceania), will be this CPO. He will assume an expanded role and oversee the Japan/ASEAN, AMIEO, and Americas regions and Global Sales and aftersales.