Struggling Nissan to cut 9% of global employees

YOKOHAMA, Japan — Nissan on Thursday said it would cut as many as 12,500 jobs and reported a deep drop in profit, suggesting its problems could be even more serious than it has acknowledged.

The cuts represent around 9 percent of the company’s global workforce of around 139,000 as of March 2018. At least some of those cuts will come in North America, where the company saw a 7.7 percent year-on-year drop in sales in the first five months of 2019. It said it would also reduce global production by 10 percent by the end of fiscal year 2022 as it seeks to address overcapacity and revitalize its stagnant product lines.

Nissan is struggling to overhaul its operations and fix its fractured partnership with French automaker Renault. The alliance, which includes Mitsubishi, is the industry’s largest, selling more than 10.7 million cars in 2018. But it was shaken by the arrest late last year of Carlos Ghosn, then Nissan’s chairman and leader of the alliance, which exposed deep operational problems and fissures within the group.

Nissan on Thursday reported a 94.5 percent drop in net profit for the April-to-June period, to 6.4 billion yen. Its revenue fell nearly 13 percent.

In May, Nissan CEO Hiroto Saikawa said the company’s expected net profit would hit “rock bottom” in 2019, dropping by almost 47 percent by the end of the fiscal year in March. The warning followed a nearly 45 percent fall in profit during fiscal year 2018.

The company said it had not changed its forecast for 2019.

Since Saikawa became CEO in April 2017, the company has been hit with a series of scandals related to inspections and emissions, shed talent at a fast clip and struggled to maintain a good relationship with Renault, which has been frustrated by Saikawa’s unwillingness to deepen the links between the two companies.

The linkup is more important than ever as the companies face an industrywide slump. Car sales are slowing across the globe, and automakers are facing increased development costs as new technology threatens the dominance of traditional auto companies that face growing threats from newcomers such as Google and Uber, which are pursuing a vision of cars that are autonomous, connected and electric.