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Nissan's three US manufacturing plants may be under threat after the Japanese car giant announced that it is cutting 20,000 jobs and closing seven factories worldwide as it attempts to reverse its financial downturn, slash operating costs and regain a foothold in key global markets.
The Japanese automaker confirmed the redundancies will affect approximately 15% of its global workforce, up from the 9,000 previously announced in November. The cuts will hit employees and contractors across manufacturing, R&D, sales and administrative functions.
Chief executive Ivan Espinosa, who stepped into the role in April, said the company would be moving with urgency to restructure. “In the face of challenging full-year 2024 performance and rising variable costs compounded by an uncertain environment, we must prioritize self-improvement with greater urgency and speed, aiming for profitability that relies less on volume,” he said.
Nissan posted a net loss of 671 billion yen ($4.6billion) for the year ending March, after declining sales in the US and China and the early effects of Donald Trump’s trade tariffs on imported cars and components. The company is also facing increased debt, with liabilities expected to climb to $5.6billion by 2026.
Focus shifts to efficiency and cost control
The company said the shake-up would reduce its global factory footprint from 17 sites to 10 by 2027, saving around 500 billion yen ($3.4billion).
There is no word yet on how the cuts will affect the motor manufacturer's three US plants - one in Mississippi and two in Tennessee - that employ around 15,000 people.
As part of the restructuring, Nissan will overhaul its supply chain to buy more parts from fewer suppliers and will target a 20% reduction in average hourly workforce costs. The company also plans to “rationalise global R&D facilities” and relocate work to lower-cost regions.
The reset follows a failed merger with Honda, which collapsed earlier this year over disagreements around corporate structure. The proposed $60billion deal would have created one of the world’s largest carmakers. Despite this, both firms continue to collaborate on electric vehicles and battery development.
HR and workforce implications for the sector
The scale of Nissan’s cuts reflects the growing challenges facing legacy automotive brands, particularly those lacking competitive EV and hybrid lineups. For HR leaders, the sweeping job losses and supply chain overhaul will prompt fresh focus on operational agility, global mobility, and cost control.
Espinosa said the business was reassessing all targets and leaving no option off the table. “As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery,” he told reporters.
The company’s share price climbed 3% on Tuesday as investors responded to reports of deeper restructuring.
