Nissan to Lay Off Thousands of Workers Amid Sales Drop in China and US
Nissan is set to lay off thousands of workers globally as it restructures to address a significant sales drop in China and the US. Facing increased competition in China and economic challenges in the US, the Japanese automaker will cut 9,000 jobs and reduce global production by 20% to save costs and respond to declining demand. This comes as Nissan also lowers its operating profit forecast for 2024 by 70%, reflecting the pressure on the company’s finances.
This decision is part of Nissan’s restructuring plan to become more “leaner and resilient,” according to CEO Makoto Uchida, who, along with other senior executives, will take pay cuts. Uchida’s monthly salary, in particular, will be reduced by half, as Nissan works to streamline its operations and regain stability in challenging markets.
Global Impacts of Nissan’s Plan to Lay Off Thousands of Workers
The Nissan layoff of thousands of workers represents a significant cost-saving measure amid dropping sales. While Nissan has not disclosed specific locations for the cuts, the company employs over 6,000 workers at its Sunderland, England plant, where it recently announced a substantial investment in electric vehicle (EV) production.
Nissan’s stock reacted to the news, trading down more than 6% in Tokyo, underscoring investor concern over the company’s future profitability and market position.
External Link: Learn more about Nissan’s strategy at BBC
Internal Link: Explore Nissan’s latest developments and EV plans at Kenkou Land
Nissan’s Struggles in China’s EV Market
Nissan faces intense competition in China’s EV market, where local brands like BYD dominate the space. As the world’s largest EV producer, China has seen falling prices, making it increasingly difficult for foreign carmakers to maintain their market share. Analyst Mark Rainford points out that “Nissan, like many Japanese automakers, has been very slow to the electrified vehicle party in China.”
To address these challenges, Nissan has committed £2 billion ($2.6 billion) to its Sunderland plant, where it will produce three EV models, including the Qashqai, Juke, and the next generation of the Leaf.
Impact of US Market Conditions on Nissan’s Sales
Nissan’s sales drop in the US also reflects the broader economic challenges of inflation and high-interest rates, which have dampened demand for new cars. The company’s latest profit forecast cuts reflect the strain these conditions have placed on its financial outlook, with a 70% reduction in its operating profit projection for 2024.
CEO Makoto Uchida emphasized that, despite these layoffs and cutbacks, Nissan’s restructuring is intended to position the company for resilience in a challenging market landscape.
