Nissan to severely cut costs due to slumping profits

According to a report by Reuters, Nissan has enforced a cost-cutting initiative that will see its managed reduce non-vital spending. This comes as the Japanese carmaker is faced with less than desirable car sales as well as plummeting profits.

The latter is exhibited by the company’s financial results, with the latest being announced on November 12, 2019. Official documents revealed that during the first half of Nissan’s 2019 financial year ending September 30, operating profit stood at 31.6 billion yen – this is 85% less than what was recorded in the same period during its 2018 financial year.

Sources within the automaker told the media outlet that the directive will remain in place until the end of the company’s financial year at the end of March 2020, and will most likely continue into the next business year.

Among the prescribed methods to reduce costs include reducing the number of attendees at meetings, while other gatherings and dinners have been cancelled altogether, or replaced by video-conferencing. There is also an effective travel ban for staff in the United States, a market where sales have been particularly hard hit, one of the sources said.

It’s been a particular challenging year for Nissan, with its previous leader, Carlos Ghosn, announcing his departure from the company after being linked to a scandal that involved under-reporting his corporate salary. Since then, several top executives have left as well, with the latest being vice COO Jun Seki. A strained relationship with Alliance partner, Renault, further compounds the list of problems that Nissan is facing.

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