Tokyo - Nissan plans to expand job cuts to over 10 000 to help turn around its
business, a person with direct knowledge of the matter said on
Wednesday, as profit continues to plunge while the carmaker
grapples with management upheaval.
The global plan includes the 4800 job cuts announced in May
and will mostly be at factories overseas with low utilisation
rates, the person said. It will be announced along with
financial results on Thursday, said the person, who declined to
be identified as the information was still private.
Nissan declined to comment on the job cuts. Its shares ended
the day up nearly 1.0%.
Analysts expect Nissan to post one of its weakest quarterly
performances since the 2008 global financial crisis when it
announces its first-quarter earnings on Thursday.
On Wednesday, the Nikkei business daily reported the
carmaker would report operating profit of "several billion yen"
for the quarter, around a 90% drop from a year
earlier. Analysts estimate a decline of 64%.
The job cuts, exceeding 7% of Nissan's 138 000-strong
workforce, come as Nissan struggles to improve dismal profit
margins in the United States, a key market where former Chairman
Carlos Ghosn for years pushed to aggressively grow market share
during his time as chief executive.
Years of heavy discounting to grow sales in the world's
second-biggest car market have left Nissan with falling demand
for the Altima sedan and other models, a cheapened brand image
and low resale values, while the costs to offer high discounts
have hit its bottom line.
The latest job cuts also highlight the extent of problems
facing Chief Executive Hiroto Saikawa, who is also grappling
with fractured relations with French alliance partner Renault SA
following the arrest of their shared former chairman.
Ghosn has been charged with financial misconduct and denies
wrongdoing.
Saikawa kept his job in a vote at an annual shareholders
meeting last month, though he had to fight off a rare rebuke by
top proxy advisory firms who urged shareholders not to reappoint
him considering he was groomed for leadership by Ghosn.
In May, Nissan forecast a 28% plunge in annual operating
profit, adding to a 45% fall in the previous year, putting the
automaker on course for its weakest earnings in 11 years.
While addressing faltering performance, Saikawa also has to
repair trust with Renault, which has deteriorated in past months
as the French automaker sought more control within Nissan.
Renault owns 43% of the Japanese carmaker, which in turn
holds a 15%, non-voting stake in its partner. Saikawa, who has
sought more equal footing with Renault, last month said Nissan
would postpone discussions on the alliance's future to
prioritise performance.
The extended job cuts were first reported by Kyodo late on
Tuesday.