Nissan has announced it will cut about 12,500 jobs globally as it unveiled quarterly operating profit had crashed by 98.5 per cent.
The Japanese carmaker will cut production capacity by around 10 per cent by the end of 2022 as sales fell in a number of its major markets.
Nissan did not say where the axe will fall, leaving 7,000 staff at the company’s Sunderland plant facing a period of uncertainty.
The job cuts were announced on Thursday alongside the carmaker’s first-quarter results, which showed a 98.5 per cent fall in operating profit compared with a year ago.
Revenues dropped 12.7 per cent to 2.3 trillion yen (£200bn). Nissan sales in Europe, excluding Russia, fell by 17.8 per cent to 536,000 units, while sales in the US slumped 9.8 per cent to 1.4 million.
Nissan has gone through a period of turbulence that saw former chairman Carlos Ghosn ousted from the company and charged with several counts of misconduct, which he denies.
Mr Ghosn was the driving force behind a concerted global expansion, including into the North American market where it has offered large discounts in order to compete. Now the company is reversing some of that strategy by pulling back.
Car manufacturers are facing slowing demand as the outlook in a number of major economies remains uncertain. At the same time, they are making the shift from petrol and diesel-engine vehicles to electric-powered alternatives.
Companies with UK operations have faced the additional upheavals associated with Brexit, the outcome of which is still unknown after three years of political wrangling.
Julie Palmer, a partner at insolvency specialists Begbies Traynor, said the job cuts were a drastic measure for Nissan.
“It seems to be the conclusion of several pieces of bad news with the accusations of financial crimes against its former chairman still lingering and its profits falling off a cliff,” she said. “The automotive brand is clearly in distress.
“For workers in the UK, there is a concern that they are in danger due to the deal that Japan had recently struck with the EU on trade, which means that tariffs on Japanese car exports to the EU will begin to taper towards zero over the next 10 years. But the Sunderland plant is strong and its production line has proven to deliver time and time again in recent years.”
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