Nissan is getting ready to tighten its purse strings by laying off thousands of its workforce. The Japanese carmaker is reportedly closing seven factories with the loss of 20,000 jobs around the world after a tumultuous year.
The company’s new chief executive Ivan Espinosa said, “In the face of challenging full-year 2024 performance and rising variable costs compounded by an uncertain environment, we must prioritize self-improvement with greater urgency and speed, aiming for profitability that relies less on volume.”
Nissan did not reveal which of its factories will be shut down, though it did announce that an additional 11,000 jobs will be cut in addition to the 9,000 that that company announced in November of last year. It is believed that this will affect staff and contractor jobs across many branches of the company.
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Nissan posted a net loss of 671 billion yen (or approximately $6.1 billion) in the fiscal year ending in March, driven by weakening sales in the U.S. and China and the early impact of President Donald Trump’s trade war. Talks over a $60 billion merger with Honda collapsed, and Espinosa took over as chief executive last month.
Espinosa added that as new management, they are taking a prudent approach to reassess their targets and actively seek every possible opportunity to implement and ensure a robust recovery.
This move by Nissan suggests that the company is facing decreased demand, rising costs, or inefficiencies that require immediate action. The factory closures and job cuts will likely help Nissan reduce operational expenses and focus on more profitable regions or models. However, this also means a significant impact on workers, local economies, and the company’s global presence. It could weaken brand perception if seen as instability, but it may also be part of a long-term strategy to streamline operations and regain competitiveness.
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For Nissan, the success of this move depends on how effectively it reinvests resources into innovation, electric vehicle development, and strategic partnerships. Overall, it’s a sign of transformation and possibly survival in an increasingly competitive auto industry.