Auto focus

India in list of Nissan job axing targets worldwide

| Updated on July 25, 2019 Published on July 25, 2019

Japanese car brand to reduce headcount in India by 1,710 in 2018/19

Nissan Motor of Japan will slash 12,500 jobs worldwide between now and 2022, of which India’s share will be over 1,710 or a little over 13 per cent, according to information on the company’s website.

In India, this exercise will happen between 2018 and 2019 though it is not entirely clear at which levels the job cuts will be carried out. This is grim news in a country that is already facing huge challenges in unemployment and whose auto sector has laid off a million people already thanks to the current slowdown.

Nissan has a manufacturing operation in Chennai, which is jointly planned with global ally, Renault. Barely 50 per cent of the capacity of 4.5 lakh units is used right now with both brands in dire need of a break to get things started all over again. There have been success stories like the Renault Duster and Kwid, which had a good initial run but did not quite manage to sustain the momentum.

Nissan has promised plenty with some of its products but these have not translated into big numbers. Its entry-level option, Datsun, has also not managed to make a difference and the company has its work cut out for the future.

Apart from India, the other countries that face job cuts are the US (1420), Mexico (1000), UK (90), Spain (470), Indonesia (830) and Japan (450 and 430 in Kyushu and Tochigi respectively). Additionally, over 6,100 layoffs will happen across six locations between 2020 and 2022.

These are clearly not the best of times for a company that was in far better shape till not-so-long ago. It has been in the news since last November when it had its CEO, Carlos Ghosn, arrested in a dramatic turn of events in Japan. Since then, the going has been tough in terms of its own relationship with Renault as well as falling sales in most regions around the world as indicated in its Thursday Q1 results.

The press release issued states that Nissan is implementing strategic reforms in order to build an operational base that will ensure consistent and sustainable profitability over the medium term. It adds that the company is moving quickly to optimise cost structures and manufacturing operations, while also enhancing brand value, steadily refreshing its line-up and achieving consistent growth globally, including in the US.

To improve its overall utilisation rate, Nissan will reduce its global production capacity by 10 per cent by the end of fiscal year 2022. In line with production optimisations, the company will reduce headcount by roughly 12,500.

Furthermore, Nissan will reduce the size of its product line-up by at least 10 per cent by the end of fiscal year 2022 in order to “improve product competitiveness by focussing investment on global core models and strategic regional models”.

Published on July 25, 2019
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