Nissan Cuts Jobs after $2bn Loss Forecast

The $2.9 billion dollars annual loss forecasted by Nissan Motor has forced the company to consider reducing its employment scheme by 20,000 people worldwide by the end of March. The number represents 8.5 percent of Nissan's total workforce. The reduction will see the size of its global workforce fall to 215,000 from 235,000, although Nissan has yet to say which plants will be affected, and by how much.

In addition, production will be slowed down to 20 percent capacity, even if the company has yet no plans to close any factories, Reuters reported. Nissan is in talks with unions about shortening the work week to four days. The company will scale back new model introductions to 48 from a previously planned 60 over the next five years.

The firm's "worst assumptions on the state of the global economy have been met or exceeded," Nissan chief executive Carlos Ghosn was quoted as saying by BBC . Declining consumer confidence and lack of access to credit are “the most damaging factors,” he said. So far, Nissan has cut 2,000 non-permanent manufacturing jobs in Japan and has sought 1,200 voluntary early retirement applications in the United States, but these layoffs are not part of the current plan of cuts.

The company, as with all the Japanese car manufacturers, have also been hit by the currency exchange rate for the yen, whose rise affects profits from sales abroad. Nissan however is also influenced by the rise of debt at Renault, in which Nissan holds 15 percent. In 2009, Nissan had, alongside with almost all the players in the industry, a slow start.

Nissan's sales in the United States, its biggest market, fell 33 percent in January, and by a similar rate in Japan. “In 1999, Nissan had a crisis,” said Ghosn as reported by bloomberg.com. “Today everyone has a problem. The financial crisis was supposed to be solved by now and it’s not.”