Nissan slashes 9,000 jobs, halves CEO pay as losses mount

Nissan has unveiled an urgent restructuring plan aimed at addressing its financial troubles, which includes shedding 9,000 jobs and imposing a 50 per cent pay cut on CEO Makoto Uchida. The carmaker, Japan’s third-largest, reported a significant quarterly loss and downgraded its annual profit forecast by 70 per cent. 

As part of its recovery efforts, Nissan will reduce global production capacity by 20 per cent, cut operating costs by ¥400 billion ($2.6 billion), and scale back its stake in partner Mitsubishi Motors from 34 per cent to 24 per cent, Caliber.Az reports via foreign media.

Nissan's challenges stem from its inability to capitalize on the growing popularity of hybrid electric and plug-in hybrid vehicles, a market where rivals like Toyota and Honda have thrived. Uchida admitted the company had failed to anticipate the demand for these vehicles, which have become key to success in the industry.

This crisis is part of a broader trend of financial struggles in the global automotive sector, with many carmakers facing intense competition, especially from Chinese electric vehicle manufacturers in the world’s largest car market. For example, Volkswagen plans to close several plants in Germany, while Stellantis recently undertook a management reshuffle after a significant decline in US sales.

Nissan’s restructuring efforts include scaling back its forecasted annual production to 3.2 million cars, down from a previous target of 3.45 million, and slashing its operating profit forecast to ¥150 billion ($1 billion) for the year. The company’s net loss for the July to September quarter amounted to ¥9.3 billion ($62 million), a stark contrast to the ¥190.7 billion ($1.27 billion) profit it posted a year earlier.

As part of its recovery plan, Nissan will focus more on its alliances with Honda and Mitsubishi to improve its competitive position. The company is also looking to refresh its aging vehicle lineup, with plans to launch new electric vehicles in China and plug-in hybrids in the US. Additionally, Nissan will introduce a new Chief Performance Officer role in December to speed up decision-making on turnaround actions.

By Vafa Guliyeva