Nissan to cut 9k jobs, cut CEO’s monthly salary by 50% as company struggles
Nissan Motor Company senior vice president Jeremy Papin discusses Nissan’s growth efforts and focuses on the ‘success’ of EVs for consumers on ‘The Big Money Show.’
Nissan Motor Company has announced that it will take “urgent steps” to change its business model after results for the first half of Fiscal Year 2024 showed a decline in consolidated revenue and sales volume worldwide, and an operating profit of 0.5%.
In a press release early Thursday morning, the company said it was “facing a difficult situation” and laid out a plan to achieve “healthy growth,” including cutting fixed costs by 300 billion yen (more than $1.9 billion) and variable costs. 100 billion yen ($649 million) while maintaining healthy free cash flow.
To achieve this goal, Nissan says it will reduce global production capacity by 20% and its global workforce by 9,000.
“The company is using various methods to reduce selling, general and administrative expenses, reduce cost of goods sold, balance its asset portfolio, and prioritize spending and investment in research and development,” said Nissan.
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Nissan is cutting jobs and CEO pay after results from the first half of FY24 showed a decline in combined revenue and net sales worldwide, and a 0.5% drop in operating profit. (Artur Widak/NurPhoto via Getty Images)
President and CEO Makoto Uchida has volunteered to immediately begin losing part of his monthly compensation and other executive committee members have also volunteered to take a pay cut.
“These restructuring measures do not mean that the company is shrinking. Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to business changes,” said Uchida. “We [can] We aim to improve the competitiveness of our products, which is fundamental to our success, and put Nissan back on the path to growth. As a united team, we are committed to working together to ensure the successful implementation of our plans.”
Nissan Motor Co President and CEO Makoto Uchida will take a 50% cut in his monthly salary to help the company meet its financial goals. (Kiyoshi Ota/Bloomberg via Getty Images)
Nissan saw a decline in all segments during the first half of FY24 compared to the same period in 2023. The categories include: net income, operating profit, operating margin, normal profit and net income. Global sales volumes also fell year-on-year to 1.6 million units.
“Profit was impacted by higher selling costs and inventory improvement efforts, particularly in the US, as well as increased monozukuri costs,” the company said.
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The company said it plans to advance the launch of new electric cars in China and plug-in hybrids and e-POWER in the United States, as well as reducing the development time for cars to 30 months.
Nissan’s ultimate goal is to “create a lean, resilient business that can quickly adapt to changes in the market.”
The Nissan LEAF is one of the company’s two electric cars. (Bryan Mitchell/Getty Images)
It will also leverage and deepen collaborations with Renault Group, Mitsubishi Motors Corporation and Honda Motor Company while “exploring more strategic partnerships in the fields of technology and software services.”
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Nissan also said that the chief executive responsible for sales and profit will be appointed and work in this role on December 1.
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