Nissan to cut more jobs, shut seven plants

Japanese auto giant Nissan Motor unveiled several cost-cutting measures on Tuesday, including eliminating 11,000 jobs and shutting seven plants.

The automaker did not disclose which plants would be closed.

Nissan Motors, which saw a massive erosion in profit in the year that ended, did not release estimates for the new fiscal. Profit tanked by 88% to 69.8 billion yen ($472 million) for the 12 months to March.

Weakening sales in the US and China led to the automaker’s eroding profit margins, leading to merger talks with Honda.

Like all other auto companies, Nissan is also dealing with the aftermath of steep auto tariffs imposed by the US, in addition to the fast-rising Chinese EV makers in Southeast Asia and other markets.

New chief executive officer Ivan Espinosa aims to save up to 500 billion yen but faces a significant challenge of turning around a Japanese automaker that has eroded its brand value.

“Our full-year financial results are a wake-up call. The reality is obvious. Our variable costs are rising. Our fixed costs are higher than our current revenue can support,” Espinosa told a press conference.

Following the job cuts, Nissan’s total workforce will be down to around 20,000.

After the automaker cuts 9,000 jobs, the number of production plants will be brought down to 10 from 17, and the complexity of parts will be reduced by 70%.

Despite the stricter measures, the automaker is unlikely to expect an immediate improvement.

Chief Financial Officer Jeremie Papin said that the company saw a 200 billion yen operating loss in the first quarter.