Nissan to downsize workforce and shut down factories anew

There seems to be no light at the end of the tunnel yet with the challenges that Nissan is currently facing.

Weakening sales in the US and China have greatly affected the struggling automaker, and its woes continued when merger talks with Honda failed to materialize. With new CEO Ivan Espinosa now at the helm, Nissan has announced its next steps to turn itself around.

As part of its cost reduction measures, Nissan is further cutting 11,000 more jobs by fiscal year 2027 – bringing the total layoff count to 20,000, or around 15% of its total workforce. About two-thirds of the job cuts will come from the manufacturing side as Nissan will also be shutting down 7 of its 17 production plants by 2027. This includes the cancellation of the planned Lithium Iron Phosphate battery plant in Kyushu.

Nissan CEO Ivan Espinosa said the rest of the job cuts will come from sales, administration, research, and contract staff as the Japanese automaker looks to eliminate inefficiencies throughout its business processes.

Likewise, Nissan aims to reduce parts complexity and reduce the number of vehicle platforms to shorten the development lead time and hasten the rollout of new models in the market. Models developed under this process include the all-new Nissan Skyline, an all-new global C SUV, and an all-new compact SUV in its Infiniti brand.

Nissan has also announced a more market-specific approach, targeting the US, Japan, China, Europe, the Middle East, and Mexico as its key markets. Ironically, some of those aforementioned markets are the countries where Nissan is losing money, and there was no mention of developments in Southeast Asia and Oceania, where the brand is in much better shape and is actually profitable.

It’s quite a stark difference to what Mitsubishi has done in the past, as its alliance partner focused more on the markets where it's profitable than fighting a losing battle. But of course, in hindsight, results will always vary in the always-evolving automotive market. Only time will tell now if Nissan has indeed made the right decision.