Nissan to Cut 20,000 Jobs, Shut Down 7 Factories in Major Cost-Cutting Measure

What Happened?

Japanese carmaker Nissan announced plans to slash roughly 15% of its global workforce after reporting a net loss of over $4.5 billion for the fiscal year.

According to reports, Nissan Motor Corp. said it will reduce the number of its auto plants from 17 to 10, impacting about 20,000 employees in its latest cutback efforts.

An increase from Nissan's previous announcement of 9,000 job cuts last November.

These moves, to be done by March 2028, are part of a recovery plan to 'create a leaner, more resilient business that adapts quickly to market changes.'

The company has also announced the scrapping of plans to build a $1.1 billion battery plant in Japan.

Its weak performance reportedly forced Nissan to cut its profit outlook four times for the financial year that just ended.

Slipping vehicle sales in China, heavy discounting in the U.S., and towering restructuring costs are major tolls affecting earnings.

'We have a mountain to climb,' Chief Executive Ivan Espinosa told reporters. 'Starting today, we build the future for Nissan.'

Why it Matters

The planned vision between a Honda and Nissan merger had ended in February, over discussions that collapsed.

Nissan's former chief executive Makoto Uchida informed Honda president Toshihiro Mibe that he was pulling out of merger talks announced in December.

The companies, alongside automaker Mitsubishi Motors, aimed to create what would have been the world’s third-largest automaker after signing a memorandum of understanding.

Honda reportedly proposed making Nissan a subsidiary, which complicated talks as things continued forward.

A consensus was later reached on Nissan's side that the talks could not proceed under that proposal.

Japanese news outlet Yomiuri previously reported that Mitsubishi Motors, which has Nissan as a major shareholder, turned down the merger in late January.

After failed negotiations, Uchida was later replaced by Ivan Espinosa, who was head of Nissan's motorsports division.

Nissan's new CEO, Ivan Espinosais, aims for total cost savings of roughly 500 billion yen through these moves.

But he faces more difficulties amid President Donald Trump's automotive tariffs, further pressuring the legacy brand to stay afloat.

'Our full-year financial results are a wake-up call. The reality is very clear. Our variable costs are rising,' Espinosa said during a news conference. 'Our fixed costs are higher than our current revenue can support.'

How it Affects You

Nissan previously expressed a willingness to work with new investment partners after the struggling automaker's efforts with Honda fell apart.

A growing threat from Chinese carmakers like Toyota further jeopardizes Nissan's risk of bankruptcy as early as 2026.

Brand inventory reductions and high interest rates amid inflation could make car shopping for consumers much more challenging in the near future.