Nissan to Slash 11,000 Jobs and Shut 7 Plants in Major Restructuring

After a turbulent year that left the Japanese automaker struggling to turn itself around, Nissan Motor announced massive fresh cost cutbacks on 13 May, announcing the closure of seven sites and the elimination of 11,000 further positions.

Nissan nearly lost its profit in the most recent fiscal year after delaying the release of projections for the one that was just beginning. In the 12 months ending in March, operating profit was 69.8 billion yen ($472 million), which was 88% less than the previous year.

After declining sales in China and the United States, the automaker's merger negotiations with Honda broke down, and it was recently compelled to replace its CEO.

 Similar to competitors, it is under pressure from U.S. tariffs and faces competition from rapidly expanding Chinese EV manufacturers in Southeast Asian and international markets.

Difficult Time Ahead for New CEO

Ivan Espinosa, the company's new CEO, wants to save about 500 billion yen in overall expenses. However, he has the challenging task of reviving a carmaker whose once-dominant brand value has been diminished.

The company's full-year financial figures are a wake-up call, Espinosa said during a news event. The facts are crystal clear. Variable costs for the company are increasing. The brand's existing revenue is insufficient to cover its fixed costs.

With the further layoffs, Nissan would have reduced its staff to about 20,000 employees overall. The company had previously stated that it would eliminate 9,000 jobs.

It will reduce part complexity by 70% and reduce the number of its production plants from 17 to 10. It did not specify which plants it anticipated closing.

Analyst Predicted the Current Move

According to analysts, Nissan is currently experiencing the consequences of its excessive emphasis on sales volume and the implementation of substantial discounts to maintain inventory turnover.

 It is currently rushing to upgrade its aged lineup as a result. However, a quick recovery is doubtful, as the carmaker reported an operational loss of 200 billion yen in the first quarter, according to CFO Jeremie Papin.

Layoff has Become a Common Scenario in 2025

With big companies like Google, Microsoft, and others continuing to reduce their workforces, layoffs in the tech sector are not expected to halt in 2025.

Companies are still laying off employees in an effort to simplify operations, save money, and emphasise automation and artificial intelligence, even though these figures are much lower than the major layoffs that occurred between 2022 and 2023.

Layoffs.fyi, a website that tracks layoffs in the industry, reports that 93 organisations have laid off nearly 23,500 tech workers so far this year, and the number is still growing. Google and Microsoft are apparently contemplating a new round of layoffs, according to the most recent job reduction reports.

According to reports, AI-led restructuring and performance-based terminations are part of the corporations' goals to increase the effectiveness of their personnel.