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Nissan Plans 20,000 Job Cuts, Primarily In Its European Business And Developing Countries: Kyodo


05/22/2020


Nissan Plans 20,000 Job Cuts, Primarily In Its European Business And Developing Countries: Kyodo
A plunge in its demand for its cars even before the novel coronavirus pandemic hot the world economy is forcing Japanese legendary auto maker Nissan Motor Co to consider reducing about 20,000 from its global workforce according to a report published by Kyodo news on Friday, these efforts would be primarily focused on reduction in Europe and in the developing countries in an effort of the company to adjust to the reduced demand, the report claimed. 
 
This report was published even as the auto maker is set to make an announcement for its updated mid-term business strategy sometime next week. Over the last three years, the profits of the company have been dropping steadily and missing targets and estimates. The most recent economic hit of the novel coronavirus pandemic has served to add on to that pressure and on the need for the company to redouble its efforts of reducing its workforce, cutting costs and staging a turnaround for the company.
 
No comments on the issue were available from Nissan.
 
In July last year, the Japanese firm has announced its plans of reducing its global workforce by about 12,500 employees which equated to about 10 per cent of the total workforce of 140,000 people attached directly to the company. If the number of job cuts is increased by the company, it would be almost equal to the total job cuts of 20,000 people that the company has sacked as a fall out of the global financial crisis in 2009.
 
The sale and profits of the company had been tumbling even before the coronavirus pandemic had hit the world and the company was speedily burning through cash. That has forced the company to significantly scale back an aggressive expansion plan that had been initiated by its ousted boss Carlos Ghosn.
 
The new business strategy that has been formulated is a renewed focus on the strengthening of its cooperation with France’s Renault SA and Mitsubishi Motors Corp. the aim of the company is to make better use of the regional and technological strengths of all three car makers as well as of the combined production capabilities.
 
While a 89 per cent drop in annual profit in the year ended March 31 was reported earlier this week by Mitsubishi, France’s finance minister said on Friday that without any immediate help the future of Renault could be at stake.
 
It was earlier widely reported the belief among the management of Nissan about the dire need of the company to be much smaller which could result in a possible reduction of manufacturing of about 1 million cars from its annual target for production as well as sale. The company also envisions a growing importance of the United States and China with respect to sale of its cars in those markets.
 
Nissan also plans to scale back its European business and turn its focus to SUVs and commercial vehicles.
 
(Source:www.economictimes.com)