Nissan plans to cut 9,000 jobs and slashes annual profit forecast | Real Time Headlines

Nissan said it would cut 9,000 jobs and cut global production capacity by a fifth while slashing its annual profit forecast in response to headwinds in China and the United States.

Japan’s third-largest automaker cut its annual operating profit forecast by 70% to 150 billion yen ($975 million), its second cut after a 17% cut earlier this year.

Operating profit in the second quarter from July to September plunged 85% to 32.9 billion yen, well below LSEG’s consensus estimate of 66.8 billion yen.

“Nissan will reorganize its business to become leaner and more resilient, while restructuring management to respond quickly and flexibly to changes in the business environment,” Chief Executive Makoto Uchida said in a statement.

“These turnaround measures don’t mean the company is shrinking,” he added.

Nissan’s global sales fell 3.8% to 1.59 million vehicles in the first half of the fiscal year, mainly due to a 14.3% drop in sales in China, where the company has been hoping to make a comeback in the face of local rivals.

U.S. sales fell nearly 3% to about 449,000 vehicles. The two markets together account for nearly half of Nissan’s global sales in volume terms.

Uchida said U.S. sales of core models fell short of expectations, and the automaker was surprised by the rapid growth in demand for hybrids and did not have the hybrid and plug-in hybrid lineup the market needed.

Nissan joins a growing list of foreign automakers struggling in China, hurt by increased competition from nimble Chinese manufacturers in the booming electric vehicle sector.

Honda on Wednesday reported an unexpected 15% drop in second-quarter operating profit due to a sharp drop in sales in China, sending shares of Japan’s second-largest automaker down 5%.

Before the financial report was released, Nissan’s stock price closed up 2.2%, while the market fell 0.25%.