Nissan to Cut 20000 Jobs and Close 7 Plants as Losses Hit 750 Billion Yen

The sweeping cost-cutting move comes amid mounting financial pressure, with the company expecting a record loss of 750 billion yen for fiscal 2024 and seeking to save 500 billion yen in fixed and variable costs.

Production capacity will be reduced from 3.4 million vehicles to 2.5 million, although the automaker will retain flexibility for a potential 500,000-unit ramp-up if demand recovers. The company also canceled a planned 153.3 billion yen EV battery plant in Kyushu, despite previous government backing as part of a 350 billion yen industry subsidy shared with Toyota and Panasonic.

The job cuts will hit every major function—65% from manufacturing, 18% from sales and administration, and 17% from R&D—and largely impact contract workers. The move significantly escalates Nissan’s previously announced November 2024 downsizing, which aimed to lay off 9,000 workers and cut output by 20%.

Nissan’s global operations have been running well below industry break-even levels. In 2024, its plant utilization rate in China was just 45.3%, in the US 57.7%, and in Japan 56.7%, compared to the 80% threshold often cited for profitability. The company’s China sales fell 12% year-on-year, marking a ninth consecutive annual decline, while Western market performance has also faltered due to strategic missteps and regulatory shifts.

The corporate shake-up follows the resignation of former CEO Makoto Uchida in March after merger talks with Honda collapsed. Ivan Espinosa, previously in charge of product planning, has since taken the helm and is pushing forward with structural reforms to restore profitability and operational focus.

Nissan is also bracing for over 500 billion yen in impairment losses, stemming from a reassessment of asset values. The company admits that its production footprint far exceeds demand, necessitating an aggressive reset to avoid long-term stagnation. Years of underperformance have now culminated in a make-or-break moment for the once-prominent automaker.