Japanese carmaker Nissan Motor Co stated it’s axing 12,500 jobs and warned a quick turnaround in its performance was not expected after reporting its quarterly profit was substantially wiped out.
The announcement on Thursday reveals how a disaster – brought about by inactive sales and rising prices – is worsening at Japan’s No. 2 automaker even because it tries to recover from a financial misconduct scandal surrounding ousted Chairman Carlos Ghosn.
Nissan, which mentioned the job cuts might be made worldwide by 2022, added that it’d reduce global production capability and its product line-up by about 10% by the tip of fiscal 2022. The automaker had 138,000 employees worldwide as of March 2018.
Its first-quarter working revenue jumped 98.5% to 1.6 billion yen ($14.80 million) because it continues to strive in North America, a key market the place it has been tingled by mounting prices of car discounts to keep up with rivals.
Years of heavy discounting to develop gross sales has left Nissan with a cheapened brand image and low vehicle resale values, whereas the costs to supply high discounts have hit its bottom line.
Nissan had signaled a steep drop in profit on Wednesday.
The dismal quarter will add stress on Hiroto Saikawa, Nissan’s embattled CEO, who has been tasked with shoring up the company’s performance amid the Ghosn scandal. Ghosn has denied the costs of financial misconduct.
Nissan’s working revenue within the April-June quarter compared with the 109.14 billion yen made within the year-ago period and missed the 39.52-billion-yen average of eight analyst assessments compiled by Refinitiv.
The company maintained its profit projection of 230 billion yen for the year ending March 2020, a 28% drop from last year and its lowest in more than a decade.