Business World

Saturday 24 August 2019

Stuck in reverse: Nissan braced for profit slump and further job cuts

Profit fears: Nissan Skyline GT vehicles go on display during a launch event. Photo: Bloomberg
Profit fears: Nissan Skyline GT vehicles go on display during a launch event. Photo: Bloomberg

Nissan confirmed reports of a 90pc drop in quarterly operating profit and a broader restructuring a day before posting results, underscoring the Japanese automaker's struggle to get back on a stable footing.

Operating profit for the fiscal first quarter will be several billion yen, the Nikkei newspaper reported, indicating a result well below analysts' average prediction for a 66pc drop to 37bn yen (€307m) in the April-June period.

In the first three months of the year, profit plummeted 98pc. Nissan has not delivered such weak back-to-back earnings since the financial crisis.

Separately, Kyodo News earlier reported that Nissan was planning to cut at least 5,200 additional jobs globally to improve its performance, on top of a plan unveiled in May to shed 4,800 positions. In total, the reductions make up more than 7pc of the workforce. Nissan board member Motoo Nagai said any restructuring measures to be announced by the carmaker "won't be simple".

As part of the planned cost reduction measures, Nissan is considering production cuts in markets including south-east Asia and Latin America, according to people familiar with the matter. Nissan declined to comment.

Bloomberg

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