Japanese automotive giant Nissan has unveiled a comprehensive restructuring plan to navigate ongoing financial difficulties. After the cancellation of a planned partnership with Honda, the company has opted to secure its financial stability independently. Nissan’s decision to back out of the deal reportedly stemmed from Honda’s intent to acquire the brand, prompting Nissan to forge its own path in the industry.
As part of this effort, Nissan will implement an extensive cost-cutting initiative to reshape its operations. One of the most significant measures in this plan is a substantial workforce reduction. The company has announced that 6,500 employees will be laid off as part of the 2025 fiscal year. From April 1, 2025, to March 31, 2026, Nissan will terminate 5,300 jobs, with an additional 1,200 layoffs set to follow in the 2026 fiscal year.
Reduction in Production Capacity and Factory Closures
To streamline operations and improve cost efficiency, Nissan will cut its production capacity by 20%. In line with this decision, the first factory closure will take place in Thailand during the first quarter of the 2025 fiscal year. A second facility is scheduled to shut down in the third quarter, while the third plant will cease operations in the 2026 fiscal year. In total, three major production sites will be shut down as part of the company’s restructuring.
Additionally, Nissan plans to reduce shift schedules to further lower operational expenses. The company is actively exploring additional cost-cutting measures to enhance efficiency and profitability.
Faster Model Development and Unified Design Strategy
Another crucial element of Nissan’s cost-saving strategy is the acceleration of its new-generation model development process. Currently taking 52 months, the development cycle will be shortened by 15 months, bringing it down to 37 months. This adjustment is expected to improve agility and enable Nissan to innovate more rapidly, strengthening its competitive position.
Furthermore, Nissan will adopt a “design simplification” strategy, meaning all of its models will adhere to a unified design language. This approach aims to standardize production processes and optimize costs by reducing design complexity.
Nissan’s extensive restructuring efforts are expected to reinforce the company’s financial foundation in the long run. However, the massive job cuts and factory closures signify a challenging transition for the brand. As the global automotive industry undergoes significant transformation, only time will tell whether Nissan’s strategic initiatives will prove successful in securing its future.