Nissan Motor Co. doubled its planned job losses and unveiled new production cuts after reporting a 99 percent plunge in first-fiscal quarter operating profit, hurt by an aging product lineup and a slide in vehicle sales in the U.S. and Europe.
About 12,500 jobs will be eliminated at 14 loss-making factories overseas, including in Indonesia and Spain, by the end of March 2023, the Yokohama-based automaker said Thursday. That represents about a tenth of Nissan's total workforce, and more than double the 4,800 reductions announced in May. The drop in operating profit far outpaced the 66 percent decline predicted by analysts, at ¥1.6 billion ($14.8 million) in the April-June period.
The dismal results are beginning to overshadow Nissan's other big headache, the arrest in November of former Chairman Carlos Ghosn on alleged financial crimes. Sluggish profits, stuck near decade lows, also weaken the company's position in a global carmaking alliance with Renault SA and Mitsubishi Motors Corp. After years of sales incentives that eroded margins, and pushing businesses to buy cars, Nissan needs to rebuild its brand image and focus on appealing to retail customers, according to Koji Endo, an analyst at SBI Securities Co.