Nissan to Slash 20,000 Jobs; Forecasts Loss

The Japanese automaker plans to cut 20,000 jobs as sales slump and it forecasts a fiscal-year loss.
Author:
Publish date:

Updated from 2:11 a.m. EST

Nissan

(NSANY)

will reduce its global headcount by 20,000, or 8.5% of its global work force, as it reports a third-quarter loss of 83.2 billion yen ($913.4 million), a swing from year-earlier net income of 132.2 billion yen, as sales slumped because of the downturn in the global economy and the negative impact of a stronger yen.

Nissan said it expects to report a net loss for the fiscal year ending March 31 of 265 billion yen, compared with a previous estimate of net income of 160 billion yen, the first time in nine years the company will report an annual loss.

The Japanese automaker said net revenue in the quarter fell 34.4% to 1.82 trillion yen, while its operating loss totaled 99.2 billion yen.

"In every planning scenario we built, our worst assumptions on the state of the global economy have been met or exceeded, with the continuing grip on credit and declining consumer confidence being the most damaging factors," said Nissan President and CEO Carlos Ghosn. "Looking forward, our priority remains on protecting our free cash flow and taking swift, adequate and impactful actions to improve our business performance."

Nissan said Monday it sold a total of 731,000 vehicles worldwide in the quarter, a decline of 18.6%.

Nissan said it plans to eliminate shifts, implement non-production days and shorter working hours. The actions will reduce global production by 787,000 units -- a 20% decrease compared with planned volume -- by the end of the fiscal year.

The company also said its product portfolio will be revised, including the cancelation of selected future programs. Nissan will launch an average of 10 all-new vehicles a year in the 2009-2012 period, the company said.

Directors on the board will forego bonus pay for the fiscal year. Their salaries, as well as the salaries of corporate officers, will be reduced by 10%, while managers' salaries will be reduced by 5%, the company said.

In forecasting a fiscal-year loss, Nissan joins Japanese rival

Toyota

(TM) - Get Report

, which is projecting a 350 billion yen ($3.85 billion) net loss for the fiscal year, its first such loss since 1950.

Copyright 2008 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.