New Nissan CEO Announces Major Restructuring: 20,000 Job Cuts and Plant Closures

Nissan Motor Co., Ltd., one of Japan's leading automakers, has announced aggressive restructuring measures this week under a new CEO who took over last month. These include doubling previously planned job cuts to 20,000, suspending operations at select domestic factories in Japan, and closing seven production plants globally by fiscal year 2027.

Escalation of Job Cuts
On May 13, 2025, Nissan unveiled a drastic expansion of its cost-cutting strategy, announcing an additional 11,000 job cuts, bringing the total to approximately 20,000 layoffs globally. This figure, representing about 15% of Nissan’s workforce of over 133,000 employees as of March 2024, doubles the 9,000 job cuts initially disclosed in November 2024.

The layoffs will affect both direct manufacturing roles and indirect positions, with some reductions implemented through voluntary separation programs. According to CEO Ivan Espinosa, who assumed leadership in April 2025, these measures are critical to addressing rising variable and fixed costs that exceed the company’s current revenue capacity.

The job cuts are part of Nissan’s broader “Re:Nissan” recovery plan, aimed at creating a leaner, more resilient business capable of adapting to market fluctuations. The layoffs will occur in phases, with 5,300 positions eliminated by the end of fiscal year 2025 (March 31, 2026) and an additional 1,200 by the end of fiscal year 2026 (March 31, 2027). The remaining cuts will target administrative and sales functions globally.

Plant Operation Suspensions and Closures
In tandem with the workforce reduction, Nissan announced plans to suspend operations at several domestic factories in Japan, with details on specific facilities and timelines still under review. Additionally, the company will close seven of its 17 global production plants by fiscal year 2027, reducing its manufacturing capacity from five million to four million vehicles annually. The first closure is scheduled for a plant in Thailand in the first quarter of fiscal year 2025 (April–June 2025), with two additional plants to be shuttered between October 2025 and March 2027. The locations of the remaining six plants to be closed have not been disclosed, though Nissan has confirmed shift reductions at its Smyrna, Tennessee, and Canton, Mississippi plants in the U.S. due to sluggish demand.

Nissan also scrapped plans for a $1.1 billion electric vehicle (EV) battery plant in Kyushu, Japan, citing a challenging business environment. This decision marks a significant shift in Nissan’s EV strategy, as the company had previously emphasized electrification as a cornerstone of its “Arc” turnaround plan.

Financial Context
The restructuring measures come in response to severe financial difficulties. For the fiscal year ending March 31, 2025, Nissan reported a net loss of 670.9 billion yen ($4.5 billion), a stark contrast to the 426.6 billion yen profit recorded the previous year. This loss, the largest since Nissan’s near-bankruptcy in 1999, was driven by a combination of impairment charges exceeding 500 billion yen, restructuring costs of over 60 billion yen, and an 88% drop in operating profit to 69.8 billion yen ($472 million).

Weak sales in key markets, particularly the U.S. and China, which account for nearly half of Nissan’s global sales volume, have exacerbated the situation. In the first half of fiscal year 2024, global sales fell 3.8% to 1.59 million vehicles, with a 14.3% decline in China and a nearly 3% drop in the U.S.

External factors, such as U.S. import tariffs on foreign-made vehicles, have added pressure, given that the U.S. is Nissan’s largest market, with many vehicles produced in Japan or Mexico.

However, recent reports indicate that a U.S.-China trade agreement may reduce tariffs, potentially easing some of this burden. Despite this, Nissan’s new CEO, Ivan Espinosa, emphasized the need for “decisive and bold actions” to enhance performance and stabilize the company’s financial position.

Stock Market Reaction
Following the announcement of the expanded restructuring plan on May 13, 2025, Nissan’s shares surged by as much as 5.5% in early trading in Tokyo, reflecting investor optimism about the company’s aggressive cost-cutting measures. This contrasts with a 6% slump in November 2024, when the initial 9,000 job cuts were announced, indicating mixed market sentiment over time. The recent share price increase suggests that investors view the latest measures as a necessary step toward a potential turnaround, though analysts caution that execution risks remain high.

Fitch Ratings, however, downgraded Nissan’s credit rating further into “junk” territory, citing short-term shocks and potential declines in production volumes. Despite this, Nissan’s leadership remains confident in its financial stability, with Chief Financial Officer Jeremie Papin stating that the company has sufficient cash reserves to navigate the restructuring.

Strategic Shifts and Leadership Changes
The restructuring is being led by Ivan Espinosa, who replaced Makoto Uchida as CEO in April 2025. Espinosa’s tenure follows a tumultuous period, including the collapse of merger talks with Honda in February 2025, which faltered due to Honda’s proposal to make Nissan a subsidiary. Espinosa has emphasized maintaining Nissan’s autonomy while remaining open to strategic partnerships with Honda, Renault, and Mitsubishi, particularly in electrification and software development.

Nissan is also adjusting its production strategy to balance internal combustion engine (ICE) and electric vehicle output, with plans to accelerate EV model development for China and hybrid models for the U.S. market. The company aims to reduce parts complexity by 70% to lower costs and improve efficiency. Additionally, Nissan has reduced its stake in Mitsubishi Motors from 34% to 24%, generating approximately 68.6 billion yen ($680 million) to strengthen its balance sheet.

Industry and Consumer Implications
The scale of Nissan’s restructuring has raised concerns about its impact on the global automotive industry and consumer confidence. Suppliers dependent on Nissan may face financial difficulties, and the company’s reduced production capacity could affect vehicle availability. Analysts warn that negative publicity surrounding job cuts and financial struggles could further erode consumer trust, particularly as competitors like Toyota, BYD, and Tesla continue to advance in EV and autonomous driving technologies.

However, Nissan’s leadership sees opportunities in streamlining operations to enhance agility and competitiveness. The introduction of new models, such as the next-generation Nissan Leaf EV and the Kicks, is part of the company’s strategy to bolster its product lineup and regain market share.

Nissan Motor Co.’s announcements on May 13, 2025, mark a pivotal moment in its efforts to navigate a challenging financial landscape. The decision to cut 20,000 jobs, close seven plants, and suspend operations at domestic factories reflects a bold attempt to address a $4.5 billion loss and declining sales in key markets. While the stock market has responded positively to these measures, the road to recovery remains fraught with execution risks and competitive pressures. Under new CEO Ivan Espinosa, Nissan is betting on cost reductions, strategic partnerships, and a renewed focus on electrification to secure its future. As the automotive industry continues to evolve, Nissan’s ability to balance cost-cutting with innovation will be critical to its long-term success.