Nissan has unveiled a significant restructuring plan, announcing the closure of seven factories and the elimination of 20,000 jobs worldwide. This move is part of a broader strategy to streamline operations and focus on profitability following a challenging fiscal year.
The company aims to reduce its total number of factories from 17 to 10 by 2027, targeting savings of 500 billion yen (£2.6 billion). The job cuts, which include 9,000 previously announced positions, represent a 15% reduction in Nissan's global workforce, affecting roles across manufacturing, sales, administration, and research and development.
Newly appointed CEO Ivan Espinosa emphasized the shift from high-volume production to profitability, stating, "We must prioritize self-improvement with greater urgency and speed, aiming for profitability that relies less on volume." This strategic pivot comes after Nissan reported a net loss of 671 billion yen (£3.4 billion) for the fiscal year ending March 2025, attributed to declining sales in the US and China, as well as trade tensions.
Despite the widespread closures, Nissan's Sunderland plant in the UK, employing 6,000 people, is not expected to be among the affected sites. The company plans to overhaul its supply chain, sourcing more parts from fewer suppliers, and aims to reduce the average hourly workforce cost by 20% through rationalizing global R&D facilities and relocating work to more competitive locations.
Earlier merger talks with Honda failed, adding to Nissan's challenges. Meanwhile, supplier AESC has secured £1 billion to build a new battery plant in Sunderland, bolstering the UK's electric car sector.
This restructuring marks a decisive step for Nissan as it seeks to navigate a rapidly evolving automotive industry and restore its financial health. Concerns are growing among consumers and industry experts about the future stability of Nissan, with some questioning whether Nissan going out of business could become a reality if these strategic challenges persist.
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