Japanese car company Nissan will cut 12,500 jobs worldwide

The car company also reported a huge drop in profits in 2019's first quarter. The departure of former chairman Carlos Ghosn, accused of financial misconduct, is touted as one of the reasons for the cutbacks

Japanese car company Nissan will cut 12,500 jobs worldwide as it struggles against competition in the US, it said Thursday.

That equates to roughly 9% of all Nissan jobs across the world. Former company chairman Carlos Ghosn left in a financial misconduct scandal last year, which had a sizable effect on operating profits.

Nissan CEO Hiroto Saikawa said the company's financial showing, which is their worst since the financial crisis in 2008, was "extremely severe." But he highlighted the potential for new technologies such as artificial intelligence and zero emission software to change the company's fortunes.

Nissan, which is in an "alliance" with French company Renault and Japanese outfit Mitsubishi ,said in a statement it would "reduce its global production capacity by 10% by the end of fiscal year 2022." It added that the drop in profits was due to lagging sales, high raw material costs and difficult foreign exchanges.

Profits dropped by 98.5% in comparison to the first quarter of 2018, Nissan said, falling from 109.1 billion yen (roughly $1 billion or €900 million at today's exchange rates) to 1.6 billion yen in 2019. 

Nissan said 14 different locations will see the effect of the planned cuts. The majority of the job cuts will be automobile plant workers.

US struggle

The company has struggled to gain a foothold in the US, where it has been forced to use discounts to challenge its rivals. It also lost ground on the biggest Japanese car company, Toyota.

Saikawa said the company had already cut 6,400 jobs in 2018 and 2019, at eight different locations.

Underreported pay

Carlos Ghosn, considered the architect of the Renault-Nissan-Mitsubishi alliance, is accused of underreporting his pay and diverting Nissan funds to personal accounts. He denies the allegations, and was released on bail in April.

Nissan pledged in 2018 to cut CO2 emissions in its new cars by 40% by 2022. 

jns/msh (AP, Reuters)