Japanese auto maker, Nissan is set to slash 20,000 jobs over a period of 12-14 months in an effort to beat the current economic slump and is expected to report a full year loss of almost £1.93 billion for the current-to-be-concluded financial year. This comes in stark contradiction to its hopes and claims of reporting a profit of £1.16 billion, amidst the current global financial crisis. It is almost after a decade that the auto-major is incurring a loss, that too this huge. Last time it was in year 2,000, which was when the current CEO Carlos Ghosn took over and changed the face of the company, Nissan-Renault as a whole. This is the first time a loss has been reported under him and he blames it majorly on the global credit crisis as no auto major has been spared by it.
The slashing of jobs amounts to a reduction of its workforce across the world by almost 9% and is being done in order to ease the cash flow for the next financial year. 12,000 job cuts would be from its Japanese operations alone and the overseas workforce will account for the rest. It would be done through voluntary retirements, eliminating short-term contracts and attrition. These measures, taken globally, would reduce the labor cost by as much as 20%.
At present Renault SA (France) holds 44% stake in Nissan and its profit escalated spiritedly after Carlos Ghosn, took over in the year 2,000. A new Chief Recovery Officer, Colin Dodge, has also been officiated to look into the restructuring process. With another major company opting for downsizing, recession is being felt more bitterly by the day and its high time strict and steady measures be put into place.
