Japanese automaker Nissan cuts jobs as its vehicles fail to sell

Nissan reported Thursday a loss for the latest fiscal quarter as its vehicle sales sank while costs and inventory ballooned, prompting the Japanese automaker to slash 9,000 jobs.

Chief Executive Makoto Uchida said he was taking a 50 per cent pay cut to take responsibility for the dismal results, while promising that a turnaround was coming.

Nissan Motor Corp announced a global workforce reduction of 9,000 people, or about six per cent of its more than 133,000 employees, as well as a plan to slash global production capacity by 20 per cent.

Uchida declined to say which regions will be affected by the cuts or give specifics.

For the latest quarter through September, Nissan racked up a ¥9.3 billion (US$60 million) loss, a reversal from the ¥190.7 billion profit recorded the same quarter a year ago.

Quarterly sales fell to ¥2.9 trillion (US$19 billion) from ¥3.1 trillion.

Uchida acknowledged Nissan didn’t respond quickly or flexibly enough to global changes, including market tastes and soaring raw material costs.

“I take this situation very seriously,” he told reporters. “Nissan will restructure its business to become leaner and more resilient.”

Nissan models did not sell well in the United States, one of the most lucrative auto markets in the world that’s recently been dominated by Ford, Toyota and Tesla.

All aspects of Nissan’s operations and plans will be under review, Uchida said.

Nissan, based in the port city of Yokohama, reported fiscal first half sales revenue of ¥5.98 trillion (US$39 billion), edging down 1 per cent from the more than ¥6 trillion the same period last year.

Its April to September profit totalled ¥19.2 billion (US$124 million), declining sharply from the ¥296.2 billion earned over the six months last year.

Nissan lowered its sales revenue forecast for the fiscal year through March 2025 to ¥12.7 trillion (US$82 billion) from an earlier projection for ¥14 trillion (US$91 billion).

It did not give a net profit forecast, citing uncertainty. It promised to give a profit forecast as soon as possible. Earlier, Nissan was forecasting an annual profit of ¥300 billion (US$1.9 billion).

Nissan now expects to sell 3.4 million vehicles around the world in the fiscal year ending in March 2025, down from an earlier projected 3.65 million vehicles. The new number is about the same that Nissan sold last fiscal year.

Nissan said it’s appointing a chief performance officer tasked with turnaround decision-making, who will begin his job next month.

No dividends will be paid out, given the harsh results.

AP