Japanese automaker Nissan has reported a staggering $4.5 billion net loss for the fiscal year ending March 31, 2025, prompting a drastic restructuring plan that includes cutting 20,000 jobs globally, equivalent to 15% of its workforce. The announcement, made on May 12, 2025, in Yokohama, reflects the company’s struggle with declining sales, high production costs, and intense competition in the electric vehicle (EV) market.
The loss, Nissan’s worst in over a decade, contrasts with a $2.8 billion profit in the previous fiscal year and stems from a 12% drop in global sales, with 3.2 million vehicles sold compared to 3.6 million in 2023/24. Key markets like China and the U.S. saw significant declines, with China sales falling 20% due to fierce competition from BYD and Tesla, whose Model Y outsold Nissan’s Ariya EV by a 5:1 ratio. Rising raw material costs, particularly for lithium and cobalt, and supply chain disruptions further eroded margins. Nissan’s operating costs also surged 8%, driven by investments in outdated internal combustion engine facilities amid a global shift to EVs.
The job cuts, targeting 9,000 positions in Japan, 6,000 in China, and 5,000 across North America and Europe, aim to save $2 billion annually by 2027. Nissan plans to reduce global production capacity by 20%, closing two assembly plants in China and one in Tennessee, while scaling back operations in Sunderland, UK. The restructuring also includes slashing executive pay by 30% and halting non-essential R&D projects, such as autonomous driving, to focus on next-generation EVs. CEO Makoto Uchida described the measures as “painful but necessary” to restore profitability by 2028.
Nissan’s challenges are compounded by its strained alliance with Renault, which holds a 43% stake. The alliance, once a cornerstone of cost-sharing, has faltered, with Nissan’s market value dropping to $12 billion, half of Renault’s. The company’s EV strategy, including the planned Leaf successor, has lagged, with only 8% of 2024 sales from EVs compared to Toyota’s 15%. Analysts warn that without a competitive EV lineup, Nissan risks further market share losses, particularly in Europe, where stricter emissions regulations take effect in 2026.
The job cuts have sparked concerns about economic impacts in manufacturing hubs, with unions in Japan and the UK planning protests. Nissan has pledged severance packages and retraining programs but faces scrutiny over its long-term viability in a rapidly electrifying industry.