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12,500 Jobs To Be Cut By Nissan, Quarterly Profits Drop By 95%


07/25/2019


12,500 Jobs To Be Cut By Nissan, Quarterly Profits Drop By 95%
The second largest auto maker of Japan Nissan Motor Corp announced axing of about 12.500 jobs as well as plans for reduction of the number of model by at least 10 per cent in its efforts to stage a turnaround of fortunes. True to reports earlier, the company reported a drop in its quarterly profits by 95 per cent.
 
The company has been under pressure ever since the arrest and ouster of its former chairman Carlos Ghosn. It is facing the challenge of dropping profits and a very strained relationship with its French partner Renault.
 
The company has already initiated a program for reduction of production output eight sites worldwide, the company chief executive Hiroto Saikawa, said and added that the company expects to complete the process of cutting jobs of about 6,400 by March.
 
Trhe company plans to cut 2,420 jobs in the US and Mexico, 2,540 in India and Indonesia, 880 in Japan, and 470 in Spain, according to a presentation given to analysts.
 
The company would cut 90 jobs in the United Kingdom, where the largest plant in the country is run by Nissan, as part of the company’s first phase of job cuts. UK however continues to be a headache for Nissan as the newly elected prime minister Boris Johnson declared this week that he would take the UK out of the European Union with or without a deal. That has raised a question about the future of the company in the UK because of fears of a disruption of its supply chain in the event of a no deal Brexit.
 
No further details about the rest 6,100 jobs at six other sites was given by Saikawa, which are planned to be cut over the next three years. 
 
“It won’t be surprising if additional jobs are reduced in the UK in the second phase of the restructuring,” said Koji Endo, head of equity research at SBI Securities. 
 
It understood “there will be no future job losses at the Sunderland plant as a result of this announcement”, said the Unite union.
 
For the April to June quarter, Nissan a drop of 95 per cent in its net profits at ¥6.4bn compared to ¥115.8bn ($1.1bn) in the same period a year ago. And according to S&P Global Market Intelligence, the net profit was nowhere near analyst profit expectations of ¥66.7bn for the quarter. Nissan also reported a decline of 13 per cent in revenues at ¥2.3tn ads its sales were hit in most of its market except in China. That included a 3.7 per cent drop in sale in the United States while there was a 16.3 per cent drop in sale in Europe.
 
The company would also be reviewing the future of its budget brand Datsun – meant for the emerging markets, which would be done as a part of the plans of the company to cut down on the number of models it currently manufactures, Saikawa said.
 
(Source:www.ft.com)


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