Nissan believes they will cut over 10,000 jobs globally in a bid to turn around its business, showing the tough times the carmaker is grappling with.
In May 2019 the company announced 4,800 job cuts would be likely, mostly at overseas factories with low usage rates. A source has revealed that the figure is expected to be more than double and the news will be delivered on Thursday when the company will also announce its financial results.
Nissan, so far, has made no comment. Yesterday its shares were up 0.9% in mid-morning trade.
Troubled Times
The potential cuts exceed 7% of Nissan’s current 138,000-strong workforce. This highlights the extent of the headaches facing their Chief Executive, Hiroto Saikawa. Saikawa is also wrestling with fractured relationships with their French alliance partner Renault SA following the arrest of their former shared chairman, Carlos Ghosn.
Ghosn was charged with financial misconduct but denies any wrongdoing. Saikawa was voted-in again at the annual shareholders meeting last month. However, he had to fight off a rebuke from top proxy advisory companies who insisted that shareholders do not reappoint him. They believe that he should have been avoided as a choice for Chief Exec as he was mentored by Ghosn.
Saikawa has also been struggling to prevent falling sales in the US. This is one of Nissan’s largest overseas markets, where high sales incentives are paid out to dealerships.
In May, Nissan forecast a 28% plummet in annual operating profit, which adds to a 45% drop in the year prior. Such declining financial results will position the carmaker with the worst results seen in 11 years. Saikawa’s problems do not end there. He is currently trying to repair trust with Renault. Their relationship deteriorated over the last few months as the French car manufacturer wanted more control within Nissan.
Renault owns 43% of the Japanese car manufacturer, thus, in turn, holding a 15%, non-voting stake in its partner. Saikawa has always wanted a more equal footing with Renault. Last month he stated that Nissan would prioritize performance and so, for now, would postpone discussions on the future of the Renault alliance.
Money Earning Ideas
To those who are facing potentially losing their jobs, maybe this would be an excellent time to look at investing in bonds – one way to safely earn money with the settlement sums you receive. Bonds are generally considered to be a safer investment than stocks. Also, maybe consider alternative passive income ideas – ways to make money with little action from you. For example, investing in real estate or even paying off debt.
Paying off debt means you are no longer paying interest to lenders, and your cash outgoings decrease. If your settlement is not enough to pay off all the debt, look at a way to simply lower the interest, perhaps by paying off a portion of the debt.
