Yokohama: Crisis-hit Japanese automaker Nissan said on Thursday it would cut 12,500 jobs and announced a plunge in quarterly net profit as it struggles with weak sales and the arrest of its former chief.
The embattled firm has been buffeted by poor performance in the United States and Europe as well as the scandal of financial misconduct charges against former boss Carlos Ghosn. “We acknowledge the first-quarter results were very tough,” chief executive Hiroto Saikawa said.
“We knew the pace of sales would be tough, but I think we have to admit that it was slightly below our expectations,” he added.
“But I believe we can fully recover to our expectation levels in the second and third quarter.” Nissan said net profit slumped nearly 95 per cent in the April-June quarter due to falling sales and growing costs.
The automaker’s bottom line profit dropped to 6.4 billion yen ($59 million) for the three months to June, from 115.8 billion yen last year, on sales down 12.7 per cent at 2.37 trillion yen.
“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,” Nissan said.
Operating profit fell 98.5 per cent, to just 1.6 billion yen, but the firm left its full-year earnings forecast in place, predicting net profit of 170 billion yen on sales of 11.3 trillion yen for the fiscal year to March 2020.
The automaker said it was laying off thousands of employees as it works to cut costs and streamline production.
“Nissan will reduce its global production capacity by 10 per cent by the end of fiscal year 2022. In line with production optimisations, the company will reduce headcount by roughly 12,500,” it said in a statement. — AFP
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