Nissan to double job cuts worldwide as profits fall
Japanese automotive firm Nissan has announced that 12,500 employees worldwide are to be made redundant, over two times more than originally planned.
The car company announced job cuts of 4,800 back in May as it seeks to reduce production capacity by ten per cent by the end of 2022.
The move is an effort by Nissan to bolster its finances as sales worldwide are in decline.
A 94.5 per cent fall in net profit was declared for the first quarter of 2019 on Thursday, one of Nissan’s worst quarterly results in ten years.
It has struggled in the US, exacerbated by declining sales in Europe, East Asia, Latin America, Oceania, Africa and the Middle East.
The planned redundancies will see the firm reduce its workforce worldwide by nine per cent.
Nissan has not revealed where the cuts will be made, but union sources at Nissan’s major UK plant in Sunderland say they are hopeful that they will not be affected.
The Sunderland site currently employs around 7,000 people.
In a statement, Nissan said: "To improve its overall utilisation rate, Nissan will reduce its global production capacity by ten per cent by the end of fiscal year 2022.
"In line with production optimisations, the company will reduce headcount by roughly 12,500."
Nissan chief executive Hiroto Saikawa said that redundancies will make up a “big portion” of the company’s estimated savings.
Nissan has been hit in the last year by a decline of diesel car sales worldwide and was also rocked when its chairman Carlos Ghosn faced arrest over claims of financial misconduct in Japan.
Ghosn oversaw years of expansion for the firm, which are now being cut back under Saikawa.
Of the overall cuts, 6,400 have already come into force with Nissan set to offload a further 6,100 staff across six of its operating sites between 2020 and 2022.
Nissan's statement continues: "The company will reduce the size of its product lineup by at least ten per cent by the end of fiscal year 2022 in order to improve product competitiveness by focusing investment on global core models and strategic regional models.
"While some of these initiatives are already underway, the company expects that substantial improvements in its performance will take time."
The car models targeted for production cuts remain undisclosed, but Saikawa hinted that they would be likely to impact “compact cars” and the Datsun as the firm offloads “unprofitable models”.
The Sunderland plant manufactures the Leaf electric car, tying in with Nissan’s present strategy, and remains profitable.
However, the car giant did deal a blow to the North East site back in March by announcing plans to cease production of the two Infiniti models being made there.
The planned production of Nissan's new X-Trail model was also moved to Japan instead of Sunderland back in February 2019, citing uncertainty over Brexit.