The company is closing 7 factories, 20000 people are out of jobs! Why is it in such a big problem?

Japan’s famous car company Nissan Motor has announced a big decision. The company has suffered a loss of ₹ 670.9 billion (about $ 4.5 billion) in the business year that ended in March last year, which is the biggest loss since French company Renault saved Nissan from bankruptcy 25 years ago. Because of this, Nissan is now taking strict steps. The company will close 7 factories and eliminate 20,000 jobs.

Nissan’s new CEO Ivan Espinosa said, “We have to change fast.” Ivan took over as CEO in April. He said that the company will not give any profit estimate till March 2026. Nissan’s cars have become old in America and China, due to which customers are decreasing. The company had already tried to work together with Honda Motor, but that plan was not successful.

What steps are being taken?

Nissan has decided to close 7 factories by 2027. This will reduce the company’s annual production capacity from 3.5 million vehicles to 2.5 million vehicles. However, it was not told which factories will be closed. Apart from this, Nissan will eliminate 20,000 jobs, out of which 9,000 job cuts were already announced in November. The company wants to save ₹500 billion through these steps.

What is Nissan’s new strategy?

Ivan Espinosa said that the company will now make rapid changes. Former CEO Makoto Uchida was criticized for being soft in closing factories. Ivan said that Nissan is now also abandoning the plan to build a battery plant in Fukuoka, so that the company can focus on its improvement.