Original source: JAPANESE car manufacturer Nissan declared on Monday that it is slashing 20,000 jobs or 8.5 per cent of its global workforce.
Nissan chief executive Carlos Ghosn said that the firm expects a 265 billion yen (£1.94bn) net loss this year.
Tokyo-based Nissan, Japan’s third-largest carmaker, has already reduced its temporary plant workers in Japan by about 2,000.
And it has slashed its British workforce by 1,200 at its Sunderland plant, where it had employed about 5,000 people.
Bosses have offered early retirement to 1,200 workers in the US, but that number will probably increase.
Like other Japanese carmakers, Nissan has been battered by the global slump, which has undermined sales in its vital US market.
A strong yen also ate into profits by eroding overseas earnings when converted back to yen.
Mr Ghosn said that Nissan’s global workforce will be reduced by 20,000 to 215,000 by March 2010.
Of the job cuts, 12,000 will be in Japan and the rest will be overseas. All contracts for temporary workers will be ended.
The company did not give a further regional breakdown. Tokai Tokyo Research Centre analyst Mamoru Katou was pessimistic about Nissan’s recovery prospects.
Nissan’s job cuts in Japan, more aggressive than its domestic rivals, show its strategy is to shift production overseas and take advantage of the soaring yen, but that would make the Nissan brand less popular in its home market, Mr Katou argued.
‘The job cuts will hurt Japanese parts-makers, too. And, in the long run, diminish the Nissan brand value in Japan,’ he said.
Mr Katou also suggested that Toyota and Honda, which both have gas-electric hybrids going on sale this year, are better positioned to boost sales when the recovery kicks in.
Nissan does not have a comparable hybrid model.
Nissan’s directors will forgo bonus pay for the year ending March.
And their salaries, as well as the salaries of corporate officers, will be reduced by 10 per cent, while managers’ salaries will be reduced by 5 per cent.
Nissan bosses also intend to negotiate a ‘work-sharing’ scheme with unions.
In work-sharing, an employee’s workload gets doled out to two or more employees, but they must take a pay cut.