Japanese auto giant Nissan will let go of some 12,500 employees and announced on Thursday that a huge drop in its quarterly income in the midst of stiff competition, financial scandal and weakening global sales have put the company in peril.
The cutdown comes on the heels of the company's sluggish quarterly performance for the year, with stocks plummeting almost 99% in the last sessions. As a result, production will be slashed by about 11% in the next three years.
Falling sales in Europe and US
The company's struggle has been highlighted by weak auto sales overseas, particularly in Europe and the U.S. and made worse by the controversy caused by the arrest of Nissan's former top executive over financial misdeeds.
The crisis-laden carmaker said the massive layoffs is more than twice the figure in retrenchment it announced recently. Nissan bared last month a job cut of 4,800, which forms part of the latest figure.
The company, which has more than 8,000 workers stationed in the United Kingdom, and almost 140,000 in other parts of the world, has yet to announce specific locations that will be affected by the layoffs.
More axes to fall
However, early reports disclosed an initial series of 2,410 terminations in Mexico and U.S., 2,530 in Indonesia and India, 850 in Japan, and 460 in Spain. The shakedown will place 7,000 workers at Nissan's Sunderland facility - which produces around 2,000 cars a day - in a situation of uncertainty.
In a statement, the company said it will slash its worldwide manufacturing output by around 10% in the next three years. "In connection with production optimization, the company will reduce headcount by around 12,500."
Corruption and scandal
Nissan is the second-biggest carmaker in Japan, and once a dominant force in the global car industry following years of consistent solid growth under erstwhile top honcho Carlos Ghosn, who was charged and unseated from his post for irregularity and misuse of company funds.
Nissan is also looking into issuing the pink slip to another batch of 6,100 staff between 2020 and 2022 at six other major assembly lines around the world.
Meanwhile, car manufacturers from around the globe now experience dismal sales as a result of trade conflicts, the weakening world economy, the Brexit controversy, and complicated policies on emission.
In Britain, total auto output has already dropped 10% since the 2016 Brexit polls and could worsen if the United Kingdom abandons the European Union if an agreement fails, recent reports said.
