Japanese automaker Nissan Motor Co. (7201.T) has initiated a sweeping cost-cutting campaign that includes suspending merit-based wage increases across its global workforce and offering buyouts to U.S. employees. The moves come as the company struggles with poor profitability in North America and other key markets despite a rise in vehicle sales.
Internal emails reviewed by Reuters reveal that Nissan has begun offering voluntary separation packages to employees at its Canton, Mississippi, plant as well as salaried staff in departments such as HR, IT, finance, and planning. These steps are part of a broader strategy unveiled by CEO Ivan Espinosa to streamline operations and return the company to profitability.
Massive Global Workforce Reductions
Earlier this month, Espinosa announced that Nissan would shutter seven production sites worldwide and eliminate 11,000 additional jobs, bringing the total planned workforce cuts to around 20,000. This is one of the most significant restructuring efforts since the departure of former executive Carlos Ghosn in 2018.
Christian Meunier, Chairman of Nissan Americas, emphasized in an internal memo that while past U.S. restructuring measures have made progress, “additional, limited, strategic action” is now essential. “This plan is crucial for Nissan’s comeback,” Meunier stated.
Merit-Based Pay Increases Put on Hold
In addition to job cuts, Nissan has also suspended merit-based pay increases for the current business year. An internal memo cited the need for stringent fiscal discipline amid ongoing market challenges. The company has not disclosed how many employees will be impacted by the salary freeze or the buyout offers.
In a brief statement, Nissan North America confirmed that a “voluntary separation program” has been made available to a limited group of salaried workers but declined to offer further details as the process is still ongoing.
Setbacks in North America and Production Consolidation
Despite increased sales volumes, Nissan’s operating profit margin in North America, including its largest market, the U.S., worsened during the fiscal year ended March 2025. Analysts attribute the company’s difficulties to an aging vehicle lineup, insufficient hybrid offerings, and the legacy of overexpansion strategies championed under Ghosn.
Nissan has not yet released the full list of global production sites it plans to shut down. However, sources indicate that plants in Oppama and another location in Japan are under review. It has also announced that it will consolidate its pickup truck production in Mexico, discontinue operations at a Thai facility by June, and exit its Indian joint venture with Renault.
Raising Funds Amid the Overhaul
As part of its turnaround plan, Nissan is also exploring ways to raise more than 1 trillion yen (approx. $6.5 billion), Bloomberg reported. The funds would come from debt instruments and asset sales, including a syndicated loan backed by the UK government.
Executives Exit With High Payouts
Amid the shake-up, Nissan disclosed on Tuesday that it paid a total of 646 million yen ($4.5 million) in compensation to four outgoing executives, including former CEO Makoto Uchida. The leadership reshuffle further highlights the scale of transformation Nissan is undertaking in its bid to recover from years of mismanagement and market misalignment.
As the company braces for a challenging fiscal year, investors and employees alike are watching closely to see whether the bold restructuring moves will finally help Nissan steer back on course.
