Can Nissan Recover Through New, Long-Overdue Restructuring Plan?; Around 20,000 Jobs, 7 Factories to Be Cut

By Taku Mukoyama / Yomiuri Shimbun Staff Writer

20:00 JST, May 14, 2025

Nissan Motor Co. has fallen into a sea of red ink, posting a net loss of ¥670.8 billion in fiscal 2024.

The Japanese automaker on Tuesday announced a set of restructuring measures, including the closure of seven factories inside and outside Japan, as well as layoffs of over 10,000 employees. However, experts say the efforts seem long overdue.

The new cuts follow a decision announced in November last year to cut 9,000 jobs worldwide, thus more than doubling the number in just six months.

As Nissan is under threat from emerging automakers in the United States and China and faces uncertainties stemming from U.S. tariff policy, dark clouds are still hanging over the automaker’s attempts to turn around its business.

At the Tuesday press conference, Ivan Espinosa, who assumed the post of Nissan president in April, stressed that it was a difficult decision, but the company had examined the additional layoff plan “coldly.”

Nissan has termed its business restructuring plan: “Re: Nissan.” With a total of about 20,000 jobs planned to be cut, it is comparable to the scale of the “Nissan Revival Plan” unveiled in 1999 under the leadership of former President Carlos Ghosn.

“It came too late,” said a senior Nissan official. “All the things should have been done at least several years ago under the previous management team.”

A painful decision

Espinosa maintained a stern expression at the press conference. He said that the closure of the plants was a “ very serious” matter and a painful decision.

If Nissan carries out domestic plant closures, it will be the first such move since the shutdown of the Murayama plant in Tokyo, which was part of Ghosn’s 1999 restructuring measures.

Nissan’s domestic sales volume for the previous fiscal year fell 4.8% from the year prior to 460,000 units. The automaker expects the figure to drop slightly in fiscal 2025.

Nissan’s domestic production capacity exceeds 1 million units. According to research firm MarkLines Co., the operating rate of Nissan’s five domestic vehicle assembly plants has recently ranged between a little under 20% and just over 60%.

The weak yen could have allowed domestic plants to serve as export bases. However, additional U.S. tariffs have further added to Nissan’s woes, apparently making it more difficult for the automaker to maintain its production levels.

No clear outlook

While it is clear that Nissan has to accept that its business is shrinking, there are no clear prospects for a turnaround.

Nissan posted an operating loss of ¥267.9 billion in its automotive business in fiscal 2024, indicating that the automaker lacks cars that attract consumers. At the press conference, Espinosa pledged to restore “Nissan’s heartbeat” by expediting the launch of new models, but the decline in the automaker’s brand power is grave.

While Nissan is busy formulating restructuring plans, emerging automakers are continuing their offensive. China’s BYD Co. has announced it will enter Japan’s market for electric kei compact cars, the area in which Nissan has traditionally been strong.

As Nissan’s investment capacity weakens — the automaker recently announced it would scrap its plan to build a plant for electric vehicle batteries — the key to Nissan’s restructuring efforts will be forging partnerships with other automakers. Merger talks with Honda Motor Co. failed in February, but Espinosa said that Nissan is actively examining collaborations with Honda in the U.S. market. It will be imperative for Nissan to materialize such collaboration soon.

“The current situation surrounding Nissan is very serious,” said Sanshiro Fukao, an executive fellow of Itochu Research Institute Inc. “It will be essential for the company to restore its ability to design new products with a sense of urgency.”