Nissan Layoffs: “These turnaround measures do not imply that the company is shrinking,” CEO, Makoto Uchida emphasised in a statement accompanying the earnings report
Nissan Layoffs: As it struggles in important markets, especially China, Nissan Motor reduced its annual projection for the second time this year and announced a number of cost-cutting measures on Thursday, including the termination of 9,000 jobs.
The automaker also revealed plans to reduce its global production capacity by 20 per cent
“These turnaround measures do not imply that the company is shrinking,” Makoto Uchida, the CEO, emphasized in a statement that was included with the earnings report.
“Nissan will reorganize its management to respond quickly and flexibly to changes in the business environment, as well as restructure its business to become leaner and more resilient,” he added.
The company’s operating profit expectation for the financial year was lowered down from its initial estimate of 500 billion yen to 150 billion yen ($974.98 million).
From July to September, operating profit was 32.9 billion yen, a dramatic 85% decrease from 208.1 billion yen in the same quarter the previous year. This was less than the average prediction of 66.8 billion yen made by eight analysts surveyed by LSEG.
Nissan’s quarterly results
Nissan now projects an annual operating profit of 150 billion yen ($975 million), a 70% decrease from its previous estimate of 17%. This is the second decline this year. Operating profit for the second quarter (July-September) was 32.9 billion yen, much less than the LSEG consensus expectation of 66.8 billion yen.
In the first half of the financial year, Nissan’s worldwide sales dropped 3.8% to 1.59 million vehicles, with a notable 14.3% drop in China due to intense competition from regional producers in the quickly expanding EV sector, according to a Reuters article. Sales in the United States fell 3% to 449,000 automobiles. Together, these two markets account for nearly 50 per cent of Nissan’s global sales volume.