Nissan is reportedly planning to cut at least 4,300 white-collar jobs and close down two of its manufacturing sites as part of a cost-cutting initiative, Reuters reports, citing information gleaned from multiple sources.
The automaker, Japan’s second largest, is aiming to reduce non-vital spending in the wake of an unexpected slump in sales. The moves are part of broader plans to add at least 480 billion yen ($4.4 billion) to its bottom line by 2023.
The latest planned action comes on top of a turnaround plan that was unveiled in July last year. The sources told the newswire that actions will include cutting the range of vehicle models that are not performing as anticipated, as well as reducing the array of product options and trims in each line. The report adds that Nissan executives estimate up to 40% of its global manufacturing capacity is unused or under-used.
Meanwhile, jobs will be cut primarily at head offices in the United States and Europe, and advertising and marketing budgets will also be reduced, the sources said. “The situation is dire. It’s do or die,” a source close to Nissan’s senior management told the news agency.
According to two sources, most of the planned cuts and measures to improve efficiency were presented last November to Nissan’s board, which gave its general blessing for the action. In December, it was reported that the company was initiating cost-cutting measures to combat plummeting profits.
Nissan has had a tumultuous 2019, with ex-boss Carlos Ghosn having left the company after being accused of under-reporting his corporate salary, using Nissan to shoulder personal investment losses, and other acts of financial misconducts. Ghosn, who was under house arrest in Japan before making a spectacular escape to Lebanon in December, has said that Nissan will probably go bankrupt within two to three years.
Several top executives have left the automaker as well, one of which was vice COO Jun Seki, who resigned from his role as the No 3 less than a month after he was appointed. A strained relationship with Alliance partner, Renault, further compounds the list of problems that Nissan is facing.
In July last year, the automaker had announced that it would be cutting 12,500 jobs globally as part of a massive restructuring process, a move that would reduce its overall global workforce of 139,000 by around 9%.