Fresh fears have been raised for workers at Nissan’s Sunderland manufacturing plant after it was reported that the Japanese carmaker plans to cut 10,000 jobs around the world in a bid to curb its tumbling profits.
Though the firm had warned in May that it would be making 4,800 job cuts, the latest figure is nearly double that number.
A company insider told Reuters that most of the axed jobs would be at factories outside of Japan because they were “underutilised”.
The Sunderland plant, which has nearly 7,000 employees, was rocked in February at the news that a new Nissan model was to be built in Japan and not the UK, as previously planned.
The carmaker’s European chief, Gianluca de Ficchy, said at the time that Brexit uncertainty had played a part in the decision, as well as reduced car sales forecasts worldwide.
Nissan warned that its first-quarter profits would be around 90 per cent lower than in the previous quarter, marking one of the carmaker’s worst quarterly performances in a decade.
The firm is struggling to rein in its sprawling operations after years of expansion under Carlos Ghosn, its former chairman, who was ousted last year in a dramatic scandal.
Nissan is particularly struggling to improve weak profit margins in the US, where Mr Ghosn pushed to aggressively expand in recent years.
“Deteriorating performance in the United States is a big issue that we’re facing,” Motoo Nagai, chairman of Nissan’s audit committee, confirmed.
“For a long time we were concerned with increasing volume (sold in the market). We were chasing numbers. Now it’s time to enhance the brand.”
If the job cuts expected go ahead, the total losses would represent more than 7 per cent of Nissan’s 138,000-strong workforce, and could also affect Nissan plants in India and Brazil.
‘Financial misconduct’ charges
Mr Ghosn has been charged with financial misconduct offences and has been re-arrested by Japanese authorities several times in order to be questioned. He denies the charges.
A lawsuit filed in a Dutch court at the end of June revealed that the former executive is seeking €15m (£13.5m) in damages from Nissan and Mitsubishi, claiming proper procedures were not followed when the two firms sacked him as chairman.
Nissan declined to comment on the job cuts, but said that a Nikkei newspaper report that it suffered a 90 per cent year-on-year drop in first-quarter profit was “broadly accurate”.
The firm will announce its earnings for the first quarter of 2019 on Thursday.