Nissan To Cut 20,000 Jobs By Next Fiscal; 7 Nissan Plants To Down Shutters

Japanese auto major Nissan has revealed a new restructuring plan, named Re:Nissan, under which it aims to achieve positive operating profitability by end of current financial year. This includes measures such as reduction of workforce, closing down of plants and reduction of fixed and variable costs. The company is targeting a total cost savings of 500 billion yen in comparison to FY24 in cost savings. The brand has also said that it is reshaping its product strategy to be more market-focused and more brand-oriented.

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The brand will shut down a total of 7 production plants in next 2 years.

Nissan will cut its workforce by a total of 20,000 employees by FY2027, this includes the already announced reduction of 9,000 workers. The brand is also looking at bringing down engineering costs, therefore reducing workforce's average cost per hour by 20 percent. Significantly, seven of the 17 vehicle production plants of the brand globally will stop functioning by FY27. This also includes the cancellation of the planned LFP battery plant in Kyushu, Japan.

New Nissan president and CEO Ivan Espinosa announced the details.

Nissan president and CEO Ivan Espinosa said: "In the face of challenging FY24 performance and rising variable costs, compounded by an uncertain environment, we must prioritize self-improvement with greater urgency and speed, aiming for profitability that relies less on volume. Re:Nissan is an action-based recovery plan clearly outlines what we need to do now. All employees are committed to working together as a team to implement this plan, with the goal of returning to profitability by fiscal year 2026.”

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The market-specific approach will be positioning the U.S., Japan, China, Europe, Middle East and Mexico as key markets. The brand says it will adopt a customised approach to other markets, including India. Work with partners like Renault, Mitsubishi and Honda will continue in vehicle intelligence and electrification. A much-talked about merger between Honda and Nissan was called off earlier this year.

In India, Nissan is about to expand its vehicle portfolio with the launch of a new model based on the Renault Triber, followed by a Hyundai Creta-rivalling SUV, and a three-row derivative based on it, due next year.