Nissan to cut 12,500 job as profits crash

Car maker Nissan said it would cut 12,500 jobs worldwide as first quarter net profits were almost wiped out.

The Japanese car giant said the job cuts, which dwarf the 4,800 cuts announced by the company in May, will be made by the end of 2022 and reduce its global production capacity by 10% as the company looks to focus investment on global core models and strategic regional models.

Though the company did not specify where the cuts will come, UK Unions were reportedly hopeful that employees at Nissan's Sunderland car plant would be spared as the plant is responsible for the manufacture of currently profitable lines and the Leaf electric car.

Meanwhile, net profits came in at YEN 6.4bn yen (£47m) for the three months to June 30, 94.5% lower than the same period last year, as overall revenues dropped by 12.7% to YEN 2.4bn following continued struggles in North America, where the company has reportedly used rampant discounting in an attempt to keep up with competitors.

"Global total industry volume remained weak during the quarter, and Nissan’s unit sales decreased as the company continued its efforts to normalize sales. Profitability was negatively impacted by the decrease in revenues and external factors such as raw material costs, exchange rate fluctuations and investments to meet regulatory standards," said Nissan.

European sales fell by 16.3% to 135,000 units as unit sales in Russia decreased 21.7% to 18,000 units, while in other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales decreased 13.1% to 174,000 units.

Nissan maintained its profit forecast of 230bn yen for its full financial year, though this would still constitute a 28% drop compared to last year and the company's weakest in more than a decade.