Nissan to cut 12,500 jobs as net profit tanks 94.5% in April-June
The number of job losses is much bigger than 4,800 the company estimated inMay.
The downsizing is «a major revision of the investments we have made inthe past,» Nissan CEO Hiroto Saikawa told a press conference at itsheadquarters in Yokohama, stressing the need for cutting costs as the group'ssales have been slumping in major markets.
Nissan will first cut more than 6,400 jobs in eight locations by the end ofthe current fiscal year through next March. It will then reduce an additional6,100 by fiscal 2022.
Nissan is trying to get back on its feet following the arrest and ousterlast November of Ghosn for alleged financial misconduct. He had led theJapanese firm for nearly two decades and created one of the world's biggestauto groups with Renault SA and Mitsubishi Motors Corp. as alliance partners.
Nissan has been reviewing Ghosn's expansionist business strategy,acknowledging it was overstretching to meet the numerical goals.
For the three months ended June 30, the carmaker posted a group net profitof 6.38 billion yen ($59 million), the lowest since 2009 and down sharply from115.83 billion yen recorded the same period last year due to sagging sales inthe U.S., European and Japanese markets.
Operating profit for the first quarter of fiscal 2019 fell 98.5 percent to1.61 billion yen. Sales came in at 2.37 trillion yen, down 12.7 percent.
Nissan maintained its full-year earnings estimates, expecting net profit tofall 46.7 percent to 170 billion yen and operating profit to decline 27.7percent to 230 billion yen on sales of 11.3 trillion yen, down 2.4 percent.
«The first-quarter results were worse than expected,» Saikawasaid. «I hope in two years we will return to recovery.»
Nissan has planned to scale back its global production capacity by 10percent and reduce model lineups also by 10 percent by late March in 2023
It is also aiming for sales of 14.5 trillion yen in fiscal 2022 comparedwith the current 13 trillion yen.
But Saikawa and other Nissan executives have been urged by someshareholders to quit because they lacked oversight of Ghosn's conduct. Theformer chairman is suspected of underreporting remuneration in Nissan'ssecurities reports and misuse of company funds.
«It is my responsibility to get Nissan on track to achieve salestarget of 14.5 trillion yen in fiscal 2022,» Saikawa said.
But he also said, «I hope preparation for the next three-yearmedium-term business plan beyond fiscal 2022 will be carried out by the nextgeneration.»