- 10,000 job cuts to include 4,800 job cuts declared in May.
- Regions with lesser utilization rates would be affected the most.
Nissan Motor Co Ltd, (Nissan), Japan, has warned about its first-quarter profit dropping by 90% than that of last year and is expected to announce over 10,000 job cuts globally as the crisis at Japan’s second largest automobile manufacturer escalates.
Nissan is struggling to improve its profit margin in U.S., a crucial market, where Carlos Ghosn tried to push the company to aggressively increase its market share when he was the chief executive of Nissan.
Reports cite, the earnings of this quarter would be the least earned profit by Nissan in its worst quarterly performance over the last decade. The company is struggling to get back on track after aggressive expansion of the company under former Nissan Chairman Carlos Ghosn.
The job cuts would include 4,800 cuts declared in May and rest of the cuts would be at facilities overseas where the utilization rates are low, a source privy to the matter claimed. Years of heavy discounts to boost sales in the world’s second biggest automobile market has left Nissan with dwindling demand for the Altima Sedan alongside various other models, low resale values, degraded brand image and almost battered bottom line.
Another reliable source with the knowledge of the matter stated that the job cuts to be announced this week would surpass 7% of the company’s 138,000 human resource and would be a part of Nissan’s turnaround strategy to be announced later in this year. The new plan is specifically designed to unwind Ghosn’s detrimental legacies.
Motoo Nagai, Chairman of the Nissan’s new audit committee stated that decrease of sales in the U.S. is a big issue company is facing. Motoo further stated that while the company was chasing numbers till today, now they would focus on enhancing the brand.
According to reports, regions with severely under-utilized production capacity that could be affected by the job cuts include Brazil and India.