Nissan quarterly net profit plunges, 12,500 job cuts planned

YOKOHAMA, Japan – Crisis-hit Japanese automaker Nissan said Thursday, July 25, it would cut 12,500 jobs and announced a plunge in quarterly net profit as it struggles with weak sales and the arrest of its former chief.

The embattled firm has been buffeted by poor performance in the United States and Europe and has been mired in the scandal of financial misconduct charges against former boss Carlos Ghosn.

“Nissan will reduce its global production capacity by 10% by the end of fiscal year 2022. In line with production optimisations, the company will reduce headcount by roughly 12,500,” the firm said in a statement.

Nissan said net profit slumped nearly 95% in the April-June quarter due to falling sales and growing costs.

The automaker’s bottom line profit dropped to 6.4 billion yen ($59 million) for the three months to June, from 115.8 billion yen a year earlier.

“Profitability was negatively impacted by the decrease in revenues and external factors such as raw material costs, exchange rate fluctuations and investments to meet regulatory standards,” it said.

The firm is working to turn around its fortunes after being plunged into crisis by Ghosn’s arrest as it fights falling sales.

CEO Hiroto Saikawa said 6,400 job cuts had already been carried out in the 2018 and 2019 fiscal years at eight locations.

He declined to identify the six locations at which the firm plans to make another 6,100 cuts between fiscal 2020-2022. – Rappler.com