In a bid to address financial challenges and facilitate operations, Nissan Motor Co. has announced a significant downsizing of its global workforce and production capacity. Following a challenging first half of fiscal year 2024, the company reported a decline in revenue and profit, prompting decisive action to stabilise its financial ground and improve efficiency.
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The decision to downsize its workforce and slash production stems from its FY24 first-half results.
In the first half of fiscal 2024, Nissan’s consolidated net revenue dropped by 79.1 billion yen, down to 5.98 trillion yen. Its operating profit took an even stronger hit, decreasing by 303.8 billion yen to 32.9 billion yen, representing a slim operating profit margin of 0.5 per cent. Net income stood at 19.2 billion yen.
To address these financial losses, Nissan announced that it would reduce its global workforce by 9,000 employees and cut production by 20 per cent. On the same trajectory of these financial adjustments, Nissan’s CEO Makoto Uchida announced he would voluntarily forfeit 50 per cent of his monthly salary starting November 2024. Other organisational committee members are also expected to take pay cuts to sync with the company’s adherence to reducing costs at every level.
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Nissan’s CEO Makoto Uchida to forfeit 50% of his monthly pay.
Nissan’s cost-cutting measures aim to reduce fixed costs by 300 billion yen and variable costs by 100 billion yen, using fiscal year 2024 as a baseline. To meet these targets, Nissan plans to reduce its global production capacity and restructure its workforce. Additionally, the automaker is focusing on decreasing selling, general, and administrative expenses, optimising the cost of goods sold, and managing its investments in research and development.
Nissan also plans to strengthen ties with its existing alliance partners – Renault Group, Mitsubishi Motors, and Honda Motor Co – and explore new partnerships in tech and software services. To expedite decision-making and implementation of these plans, Nissan will appoint a Chief Performance Officer as of December 1, responsible for overseeing sales and profit.
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The Magnite has been Nissan’s flag bearer in India in the past years.
In India, the Nissan Magnet has been the only combatant of the brand until the X-Trail was launched most recently. The company has been struggling to keep its feet cemented on our soil in terms of sales. Moreover, how the global decision to slash production and reduce workforce will affect India remains to be seen.
