Finance

Nissan's Bold Move: 11,000 Job Cuts and Factory Shutdowns

2025-05-13

Author: Liam

Nissan's Latest Restructuring Shake-Up

In a dramatic overhaul, renowned Japanese automaker Nissan has revealed plans to slash an additional 11,000 jobs worldwide and shutter seven factories. This drastic maneuver comes as the company grapples with lackluster sales and intense market pressures.

Facing Tough Times in Key Markets

Falling sales in its two largest markets, China and the United States, have severely impacted Nissan’s earnings. Heavy discounts in the US to attract buyers have further strained the situation. Additionally, a potential megamerger with Honda and Mitsubishi fell apart earlier this year, adding to the company's woes.

A Year of Massive Layoffs

With these new cuts, Nissan's total layoffs for the past year will reach approximately 20,000 positions—an alarming 15% of its global workforce. As of now, it remains unclear which locations will be affected, including whether the significant Sunderland plant in the UK will bear the brunt of the layoffs.

Government Engagement and Local Importance

Acknowledging the plant’s "vital importance" to the northeast of England, the UK government has pledged to work closely with Nissan during this pivotal restructuring process. Currently, Nissan employs around 133,500 people worldwide, with about 6,000 at the Sunderland facility.

Manufacturing Takes the Bulk of Cuts

According to Nissan's CEO, Ivan Espinosa, up to two-thirds of the job reductions will originate from manufacturing roles, while the rest will come from sales, administrative positions, and contract staff. This move adds to the 9,000 job eliminations previously announced in November, which were part of a broader strategy aiming to reduce global production by 20%.

Failed Merger and Leadership Changes

Earlier this year, discussions between Nissan and Honda aimed at forming a multi-billion-dollar partnership to enhance competitiveness, particularly in China, collapsed without agreement. This setback prompted a leadership change, with Espinosa taking over from former CEO Makoto Uchida.

Financial Woes and a Wake-Up Call

Nissan recently reported a staggering annual loss of 670 billion yen (approximately $4.5 billion). The company pointed to rising operational costs and tariffs imposed by the US as key contributors to its financial struggles. Espinosa described the past financial year as "challenging," a definite wake-up call for the automotive giant.

No Future Forecast Amid Uncertainty

Given the unpredictability of the US market and ongoing tariff issues, Nissan has refrained from issuing any profit forecasts for the upcoming year, projecting stagnant profit levels even without considering tariff impacts. With an uncertain landscape ahead, Nissan's ability to navigate these turbulent waters remains to be seen.