Following a dismal second-quarter performance that basically saw its profits wiped out, Japanese automaker Nissan announced today that it us cutting some 12,500 jobs worldwide.
Japan’s number-two auto company has been hit by the twin scourges of weak sales and rising costs, this in the wake of the scandal surrounding the ouster and legal troubles of former chairman Carlos Ghosn, and the well-reported problems Nissan is experiencing with its alliance partner Renault.
Most of the job cuts will affect positions outside of Japan, and they will take effect by 2022. Nissan is in the process reducing production capacity globally – and the size of its vehicle lineup - by around 10% in that time period.
How bad was the company’s 2019 Q2 performance? Profits fell by a staggering 98.5%, with North America the market that is most dragging the company down. We’d reported a few months ago that the company was reversing a long-standing practice on our continent of driving sales with deep discounts, and it appears those discounts have hurt the company’s bottom line significantly – in part because they created a perception of Nissan as a bargain-basement brand.
Overall sales for the auto manufacturer were down by 6% globally in the second quarter of 2019.
In the midst of all this, Nissan CEO Hiroto Saikawa has hinted that he may step down within a year and that the company could make substantial changes at the leadership level.
“You can expect that things will move, that we will not require a full year to make changes in the leadership.”
- Nissan CEO Hiroto Saikawa
Of course, Nissan’s plan to reduce its product offering by 10% by 2022 means that speculation will start immediately regarding which models might be on the chopping block. With North American being a particular problem area for the brand, we can expect to see changes to what local Nissan dealers offer American and Canadian consumers in the next three years.