Nissan to Cut 20,000 Jobs Amid Global Sales Slump and Industry Turmoil
Tokyo: Japanese carmaker Nissan has unveiled a sweeping restructuring plan in response to ongoing economic uncertainty and plummeting vehicle sales worldwide. The move includes slashing 20,000 jobs—about 15% of its global workforce—and shutting down seven of its manufacturing plants across various regions.
The announcement marks a significant step for the automaker as the global automotive industry grapples with weakening demand, shrinking profit margins, and rising costs. Nissan’s decision follows a broader wave of layoffs by tech giants like Apple, Samsung, and Google, indicating the ripple effects of the global downturn across multiple sectors.
Sharp Declines in Major Markets
Nissan’s troubles intensified following a sharp decline in sales in two of its most critical markets: the United States and China. In November, the company reported a dramatic 94% plunge in half-year profits, citing sluggish demand and deep discounting. This financial blow initially led to plans for 9,000 layoffs, but that number has since more than doubled.
Japan’s public broadcaster NHK confirmed that 20,000 positions will now be eliminated, including jobs across manufacturing, administration, sales, research, and contractual roles. Manufacturing staff are expected to bear the brunt of the cuts, accounting for nearly two-thirds of the layoffs.
Plant Closures and Cost Reduction
As part of the restructuring, Nissan will shutter seven of its 17 production facilities, cutting its manufacturing operations by more than 40%. Though the company has yet to disclose specific locations, uncertainty looms over the future of key plants, including the Sunderland facility in the UK, which employs around 6,000 people.
In response, UK officials have expressed concern and affirmed that the Sunderland plant remains “crucial” to the region’s economy. The government has promised to work closely with Nissan as it moves forward with its global restructuring efforts.
Mounting Losses and Leadership Changes
Financially, Nissan has faced a tough road. It closed the last fiscal year with estimated losses between 670 and 750 billion yen (approximately $4.5 to $5.08 billion). CEO Ivan Espinosa, who recently succeeded Makoto Uchida, underscored the severity of the situation. “These results are a wake-up call. Rising fixed costs and operational expenses are outweighing our current income levels,” he said.
Compounding the company’s financial woes are tariffs introduced by the U.S. during the Trump administration. These duties have squeezed profit margins, prompting Nissan to withhold income forecasts for the upcoming fiscal year due to the unpredictable nature of trade policy.
Failed Merger and Strategic Reassessment
Adding to Nissan’s challenges, a high-profile merger involving Honda and Mitsubishi fell through earlier this year. The alliance aimed to form a $60 billion auto group—projected to become the world’s fourth-largest carmaker by volume. However, negotiations collapsed over financial disagreements and conflicting strategic visions.
In response, Nissan has begun re-evaluating its long-term investments, especially in the EV sector. Just last week, it scrapped plans for a new electric vehicle and battery plant in Japan—part of a broader strategy to limit spending amid growing market volatility.
Tough Competition in China, Inflation in the U.S.
In China, Nissan is facing stiff competition from domestic EV leaders like BYD. With Chinese manufacturers dominating the EV space, foreign companies such as Nissan have been left scrambling to catch up in the world’s largest EV market.
Meanwhile, in the United States, despite a slight uptick in Nissan’s retail sales, the overall automotive market remains sluggish due to rising inflation and higher interest rates, both of which are eroding consumers’ buying power.
Recession Shadows Loom Over Indian Auto Industry
India’s automotive sector is also beginning to feel the heat. Companies like Tata Motors and Mahindra are witnessing growing pressure amid weakening demand and economic uncertainty. Tata Motors’ share prices have experienced a steady decline, and industry analysts caution that if global market conditions don’t stabilize, Indian carmakers may be forced to follow in Nissan’s footsteps with job cuts and production rollbacks.
As the auto industry navigates a rapidly changing global landscape—with shifting consumer preferences, rising costs, and fierce EV competition—Nissan’s restructuring may be just the beginning of broader transformations across the sector.
