Nissan plans to shed 10,000 jobs worldwide after profits nosedive; cuts are likely to hit factories in South America

  • Nissan Motor Co Ltd is planning to cut more than 10,000 jobs globally to help turn around its business, a source said on Wednesday

  • The cuts come after Nissan announced in May it would trim 4,800 jobs from its global workforce of around 139,000

  • Nissan's net profit fell to a near-decade low in the last business year

Tokyo: Nissan Motor Co Ltd is planning to cut more than 10,000 jobs globally to help turn around its business, a source said on Wednesday, showing a tough road ahead for the automaker which is also reeling from the ouster of former Chairman Carlos Ghosn.

The cuts come after Nissan announced in May it would trim 4,800 jobs from its global workforce of around 139,000.

Nissan's net profit fell to a near-decade low in the last business year and it has already warned of "a difficult business environment" for the next 12 months.

The company is due to announce first-quarter earnings on Thursday, and a Nissan spokesman said there would be no comment on the reports before then.

"We've not decided yet what we'll announce (at the Thursday earnings press conference), and we don't comment on (media) speculation," Nissan spokesman Koji Okuda told AFP.

 Nissan plans to shed 10,000 jobs worldwide after profits nosedive; cuts are likely to hit factories in South America

Representative image. AFP

In May, Nissan forecast a 28 percent plunge in its annual operating profit after a 45 percent fall in the previous year, putting it on course for the weakest earnings in 11 years.

The Renault-Nissan alliance has been under strain since the arrest and ousting of Carlos Ghosn late last year on charges of financial misconduct, Reuters said.

The company has been hit by a fall in sales in the United States and Europe and is still reeling after the shock arrest of former boss Ghosn on financial misconduct charges.

It has also been facing tensions with its French partner Renault, which owns 43 percent of the Japanese manufacturer, and is undergoing an overhaul intended to strengthen governance after the Ghosn scandal.

The cuts are likely to hit some factories in South America and other regions where Nissan has low profitability, Kyodo news agency said.

In May, Nissan reported net profits for the fiscal year to March 2019 of 319 billion yen ($2.9 billion)—the lowest amount since 2009/10 when the company was struggling in the wake of the global financial crisis.

It was a decline of 57 percent compared to the previous fiscal year and the profit outlook for the current fiscal year was forecast to be even worse—at 170 billion yen.

(With additional inputs from agencies)

 

Updated Date: Jul 24, 2019 11:26:06 IST