Nissan Motor Company has announced it will cut 9,000 jobs and reduce CEO Makoto Uchida’s monthly pay by 50% as the company faces a severe financial situation. The decision comes after disappointing financial results from the first half of Fiscal Year 2024. Nissan’s consolidated net revenue, global sales volumes, and operating profit margin all decreased compared to the same period in 2023.
The company plans to reduce fixed costs by more than $1.9 billion and variable costs by $649 million while maintaining a healthy free cash flow. Nissan will also cut global production capacity by 20%. “The company is implementing various measures to lower selling, general, and administrative expenses, decrease the cost of goods sold, rationalize its asset portfolio, and prioritize capital expenditures and investments in research and development,” Nissan said in a news release.
These measures are part of a broader strategy to make Nissan leaner and more resilient without shrinking the company.
Nissan cuts jobs amid financial struggles
This includes restructuring management to respond more flexibly to changes in the business environment and enhancing the competitiveness of its products.
Nissan experienced declines in net revenue, operating profit, and net income during the first half of FY24. Global sales volumes also fell to 1.6 million units, impacted by higher selling expenses, inventory optimization efforts in the US, and rising manufacturing costs. The company plans to advance the introduction of new energy vehicles in China and plug-in hybrids and e-POWER models in the United States.
Another goal is reducing vehicle development lead time to 30 months. Nissan will work closely with Renault Group, Mitsubishi Motors Corporation, and Honda Motor Company while exploring more strategic partnerships in technology and software services. A new chief performance officer responsible for sales and profit will be appointed and operational by December 1.
