Nissan comes with a new plan: to cut 20,000 jobs and close factories to survive

Nissan is making big changes to its business as it fights for survival. The company announced its "Re:Nissan" recovery plan, a comprehensive strategy designed to boost profitability by 2026. The plan involves some tough decisions, including cutting 20,000 jobs worldwide by 2027.

To streamline its operations, Nissan will close seven of its 17 production plants across the globe. The intention is to make the company more efficient in both its traditional gasoline-powered vehicle business and its growing EV sector.

Nissan's President and CEO, Ivan Espinosa, claims that these actions are necessary due to challenging financial performance and rising costs. The Re:Nissan plan aims to cut a total of 500 billion yen ($3.38 billion) in fixed and variable expenses compared to the fiscal year 2024.

A key part of this cost-cutting strategy focuses on reducing variable costs by 250 billion yen ($1.69 billion). Nissan plans to achieve this by making its engineering processes more efficient and working with fewer suppliers. The company has even created a special team of 300 experts to oversee these cost-saving measures.

Around 3,000 employees are being moved from long-term projects to focus on immediate cost-efficiency efforts, and some less important product development projects beyond 2026 are being put on hold. Nissan will also overhaul its supply chain to rely on a smaller number of suppliers, which the company hopes will make its operations more stable and simplify the movement of parts, especially for EVs.

On the fixed cost side, Nissan will save another 250 billion yen ($1.69 billion) through plant closures, job reductions, and the cancellation of a planned battery factory in Kyushu. The company also recently closed a factory in Wuhan, China, which it operated with its Chinese partner, Dongfeng.

Nissan will reduce the complexity of its car parts by 70% and decrease the number of its vehicle platforms from 13 to seven by 2035. These changes are expected to lower the average cost of engineering per hour by 20%. Nissan also plans to speed up its vehicle development process, aiming for a 37-month cycle for main models and 30 months for later versions.

The company is also changing its approach to global markets, focusing its engineering resources on key regions like the United States, China, Japan, Europe, the Middle East, and Mexico. For example, Nissan intends to offer more new energy vehicles (NEVs) in China and introduce more small and medium-sized electric SUVs in Europe.

The company's luxury brand, Infiniti, will receive renewed attention, particularly in North America, with plans for several hybrid and EV models. Nissan has also canceled three EV projects and delayed the production of two electric crossovers for the North American market. The model known as PZ1K is now expected to start production in January 2028, about a year later than initially planned. The Infiniti version, PZ1J, is now scheduled for production in May 2028, a delay of around four months.

Collaborations with Renault and Mitsubishi Motors will stay in place. The new battery electric vehicle (BEV) for Mitsubishi in North America will be based on the next generation of the Nissan Leaf. Renault in France will also build a fully electric version of the Nissan Micra, as it will share the same platform as the Renault 5. Nissan's cooperation with Honda in the areas of electrification and vehicle intelligence will continue, even after discussions about a potential merger did not move forward.

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