Up to 9,000 employees globally face termination amid company's financial woes
Automobile manufacturer Nissan has announced that it is laying off 9,000 employees globally as part of its move to "right-size" the business amid financial woes.
Nissan said it is aiming to reduce fixed costs by JPY300 billion and variable costs by JPY100 billion while maintaining a healthy free cash flow.
"To achieve this, Nissan will cut global production capacity by 20% and reduce its global workforce by 9,000," it said in a media release.
The automobile manufacturer did not provide further details on the layoffs, such as who will be affected and when the cuts will begin. It has 133,580 employees on a consolidated basis as of March 31, according to the company's website.
In addition, the company said it will also implement various measures to lower selling, general, and administrative expenses, decrease the cost of goods sold, rationalise its asset portfolio, and prioritise capital expenditures and investments in research and development.
Meanwhile, Nissan President and CEO Makoto Uchida also announced that he is giving up 50% of his monthly compensation starting November 2024.
"In response to the latest performance, in order to demonstrate management responsibility, I am forfeiting 50% of my compensation starting from this month," he said. "Other executive committee members will also voluntarily take a pay reduction accordingly."
Uchida said these measures do not imply that the company is shrinking.
"Nissan will restructure its business to become leaner and more resilient, while also reorganising management to respond quickly and flexibly to changes in the business environment," he said in a statement.
These measures come as Nissan's net income was down by 94% at JPY19.2 billion in its first half financial results.
Its net revenue was also flat at JPY5.984 trillion, with operating profit falling by 90% year-over-year to JPY32.9 billion.
