As it seeks to get back on track following disappointing financial performance, Nissan is initiating a major global cost reduction.
According to internal emails obtained by Reuters, the Japanese automaker is now offering voluntary severance to its employees in the United States and imposing a freeze on merit-based salary increases worldwide.
Drastic cuts: Seven plants and 20,000 jobs affected
CEO Ivan Espinosa launched a new round of cuts this month, including the closure of seven plants and the elimination of 11,000 additional jobs, bringing the total number of eliminated positions to nearly 20,000.
In the U.S., the Canton, Mississippi plant is particularly targeted, as are several administrative sectors: human resources, finance, information technology, and planning.
“A necessary step to come back strong.”
— Christian Meunier
In a message to American employees, Christian Meunier, President of Nissan Americas, justified these measures as strategic and necessary: "The work we are doing today is crucial for Nissan's comeback – delivering vehicles, generating revenue, and satisfying our customers."
The exact number of employees who have received or accepted the voluntary severance offers remains unknown at this stage.
Salary increases suspended globally
A separate internal communication confirms that all performance-based salary increases are suspended for the current fiscal year. Nissan confirmed the news, without providing further details, indicating that the process is still ongoing.
A strategy at odds with American goals
These cuts go against political efforts to revive American automotive production, especially in a context where the U.S. administration is focusing on tariffs to encourage local manufacturing.
Even though sales increased in North America for the fiscal year ending in March, Nissan's profit margin fell, a clear sign that volumes are no longer enough to offset the weakening product offering.
Underlying structural problems
Analysts point to an aging catalog, a delay in hybrid models for the American market, and a legacy too focused on volume inherited from Carlos Ghosn. Since his departure in 2018, Nissan has been seeking a new identity.
Other restructurings underway
Nissan has confirmed the closure of a plant in Thailand by June and the intention to consolidate pickup truck production from Mexico and Argentina at a single Mexican site. In addition, Renault will buy back Nissan's share in their Indian joint venture. In Japan, the Oppama plant and another facility are also under scrutiny.
Finally, according to Bloomberg, Nissan is considering raising more than 1 trillion yen through asset sales and debt issuance, including a syndicated loan guaranteed by the British government.
Nissan is going through a pivotal period, balancing budgetary rigor, strategic refocusing and a brand image overhaul, hoping for a sustained return to success.