Nissan faces $418m costs this year due to job cuts

Nissan Motor Co. will incur an additional ¥60 billion (US$418 million) in costs this fiscal year due to job cuts tied to its ongoing restructuring.

Chief financial officer Jeremie Papin revealed the information during an analyst call earlier this month. The expenses will be accounted for in the fiscal year starting April 1.

The automaker plans to reduce its workforce by 20,000 jobs and shut down seven of its 17 factories. This follows a net loss of US$4.5 billion for the financial year ending March 2025.

While the job cuts and factory closures will affect domestic operations, the exact locations have not been disclosed.

New CEO Ivan Espinosa is leading a major restructuring amid weak sales in the US and China, an aging product lineup, and leadership instability.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Nissan’s cyclical restructuring mirrors its 1999 crisis and recovery

The current job cuts and factory closures at Nissan echo a similar crisis the company faced in 1999, when it was burdened with $22 billion in debt and faced potential bankruptcy1.

That previous restructuring was led by Carlos Ghosn, who implemented the “Nissan Revival Plan” that included significant workforce reductions, supplier diversification, and plant closures—similar to the measures being introduced today2.

The 1999 turnaround succeeded impressively, with Nissan achieving a 4.5% operational margin by March 2002 and reducing debt significantly, a year ahead of schedule3.

Today’s $4.5 billion loss and planned elimination of 20,000 jobs (15% of its workforce) suggests a comparable scale of restructuring is needed to address fundamental business challenges4.

This demonstrates how automotive companies often require major restructuring as market conditions, technology, and competitive landscapes evolve dramatically.

2️⃣ Leadership changes during crises follow predictable patterns

Nissan’s appointment of Ivan Espinosa as CEO during this crisis follows the company’s historical pattern of leadership changes during financial difficulties, similar to when Carlos Ghosn was brought in specifically to lead the 1999 turnaround2.

The “revolving-door of leadership” mentioned in the original article is evidenced by the ouster of Makoto Uchida after the collapse of merger plans with Honda, highlighting how failed strategic initiatives often trigger executive changes.