Nissan Reports Loss and Announces Job Cuts
Nissan Motor Corporation reported a loss for the latest fiscal quarter, marking a significant reversal from the profit recorded in the same period last year. This disappointing performance prompted the Japanese automaker to announce a global workforce reduction of 9,000 people, representing approximately 6% of its total workforce. Additionally, Nissan plans to slash its global production capacity by 20%.
Chief Executive Makoto Uchida acknowledged that Nissan failed to respond quickly or flexibly enough to recent global changes, including shifting market preferences and rising raw material costs. He expressed his commitment to restructuring the business to become leaner and more resilient. Uchida also announced a 50% pay cut for himself to take responsibility for the company's dismal results.
The company's quarterly sales fell to 2.9 trillion yen ($19 billion) from 3.1 trillion yen, while its net loss reached 9.3 billion yen ($60 million). Nissan's struggles were particularly evident in the lucrative U.S. market, where its models failed to compete effectively against rivals like Ford, Toyota, and Tesla.
Nissan's fiscal first-half sales revenue edged down 1% to 5.98 trillion yen ($39 billion) compared to the same period last year. Its profit for the six months totaled 19.2 billion yen ($124 million), a sharp decline from the 296.2 billion yen earned in the previous year.
In light of these challenges, Nissan has revised its sales revenue forecast for the fiscal year ending March 2025 to 12.7 trillion yen ($82 billion), down from the earlier projection of 14 trillion yen ($91 billion). The company also lowered its vehicle sales target to 3.4 million units for the same period.
Nissan has appointed a chief performance officer to oversee turnaround efforts, with the individual set to begin their role next month. The company has also suspended dividend payouts due to the current financial situation.