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Nissan has unveiled an ambitious restructuring plan, announcing the elimination of 11,000 jobs and the closure of seven factories worldwide. This sweeping change comes as the company grapples with plummeting sales, especially in its two largest markets—China and the United States.
In China, Nissan has faced growing competition from domestic automakers, particularly in the electric vehicle sector. Meanwhile, in the US, the economic impact of inflation and higher interest rates has slowed vehicle sales, forcing Nissan to offer significant discounts, which have further squeezed its margins.
The latest round of job cuts brings the total number of positions eliminated over the past year to around 20,000, or 15% of its global workforce. These measures are part of a broader effort to reduce costs and adjust to challenging market conditions that have impacted Nissan’s bottom line.
Although the company has not yet disclosed where these job cuts will take place, it is still unclear whether the Sunderland plant, which employs about 6,000 people, will be impacted. This uncertainty adds an additional layer of complexity to Nissan’s ongoing restructuring efforts.
Ivan Espinosa, Nissan’s CEO, stated that two-thirds of the job cuts will be in the manufacturing sector, with the remaining cuts affecting sales, administration, research, and contract staff. Espinosa emphasized that these decisions were necessary to reposition the company for the future, despite their difficult nature.
These layoffs are in addition to the 9,000 job reductions Nissan announced in November, part of a broader cost-saving initiative. As part of this effort, Nissan aims to reduce its global production by 20%, a strategy designed to help the company regain financial stability.
Earlier in the year, Nissan sought to form a merger with Honda and Mitsubishi, aiming to create a more formidable competitor in the global automotive market, particularly in China. However, the merger talks fell apart in February after the companies were unable to agree on the terms of the deal.
Had the merger been successful, it would have resulted in a $60 billion automotive giant, positioning Nissan as the fourth-largest car manufacturer globally by vehicle sales. However, the collapse of these talks has left Nissan without a key strategic alliance that could have provided much-needed support.
Alongside the failure of the merger, Nissan reported an annual loss of 670 billion yen ($4.5 billion), which the company attributed to rising operational costs and the impact of US tariffs. These financial pressures have further complicated the company’s ability to remain profitable.
Espinosa acknowledged that the past year had been one of the most challenging for Nissan, citing rising costs and an uncertain economic climate as key factors. He referred to the company’s recent financial results as a “wake-up call” and stressed the need for urgent action to navigate the turbulent market conditions.
As part of its strategy to curb expenses, Nissan also canceled plans to build a new factory in Japan focused on electric vehicle production. This decision underscores the company’s shift away from major investments in favor of more strategic, cost-effective initiatives.
Nissan’s troubles are not confined to Japan. In China, the company is facing stiff competition from homegrown electric vehicle manufacturers such as BYD, which have rapidly expanded their market share in recent years. The increasing dominance of these local players has made it harder for Nissan to maintain its competitive edge in the world’s largest automotive market.