Japanese car giant Nissan has said it will lay off 9,000 workers globally and trim production capacity by a fifth amid deteriorating sales in its major markets.
According to a statement issued on Thursday, the automaker has sharply lowered its annual operating profit outlook by 70% to 150 billion yen ($976 million) in a second downward revision this year. It also announced it will sell back 10% worth of its shares in Mitsubishi Motors, reducing its stake from the current 34%.
The company’s CEO and president, Makoto Uchida, will voluntarily forfeit 50% of his monthly compensation starting from this month, while other executive committee members will also voluntarily take a pay reduction.
“Facing a severe situation, Nissan is taking urgent measures to turn around its performance and create a leaner, more resilient business capable of swiftly adapting to changes in the market,” the statement read.
Japan’s third-largest automaker, Nissan has been struggling with sliding sales in the world’s top car market, China. The company’s global sales declined 3.8% to 1.6 million vehicles for the first half of the financial year, mostly due to a 14.3% plunge in China, where it faces growing competition from local automakers.
In the US, the company’s sales slid 3% to about 449,000 vehicles. Together, the Chinese and US markets account for nearly half of Nissan’s global sales by volume.
According to the statement, the company plans to advance the introduction of new energy vehicles in China, as well as plug-in hybrids and e-POWER models in the US, while simultaneously increasing sales per model to enhance efficiencies.
“These turnaround measures do not imply that the company is shrinking,” Nissan CEO Uchida said.
“Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment,” he added.
Uchida assumed his current role in 2019, at a time when the company was grappling with a management crisis in the wake of former chairman Carlos Ghosn’s arrest for alleged financial misconduct.
Since then, Uchida struggled to rejuvenate the troubled automaker. He is now seeking to expand Nissan’s lineup of electric vehicles, forge new partnerships, and sell an additional 1 million cars a year by 2027.