Nissan slashes thousands of jobs

Summary

Marketplace Morning Report: Nissan Slashes Thousands of Jobs Release Date: May 13, 2025

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Introduction

In this episode of the Marketplace Morning Report, hosted by Marketplace and featuring coverage from the BBC World Service, listeners are briefed on the latest developments in the global business and economic landscape. The report primarily focuses on Nissan's significant workforce reductions amidst declining sales, as well as other pivotal market and geopolitical updates.

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Main Story: Nissan's Workforce Reduction

Japanese automotive giant Nissan has announced a drastic reduction of 20,000 jobs worldwide and the closure of seven factories, as the company grapples with falling sales in key markets, particularly China and the United States. This bold move marks a significant shift under the leadership of new CEO Ivan Espinoza, who assumed the role last month.

Ivan Espinoza addressed the company's dire financial state during a recent press conference:

“Our full year financial results are a wake up call. The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging. Hence, Nissan must prioritize self-improvement with greater urgency and speed.”
(02:02)

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Analysis: Factors Behind Nissan's Decline

BBC’s Theo Leggett provides an in-depth analysis of Nissan's downturn:

"Arguably, in the last decade, Nissan took its eye off the ball. It seemed to be more focused on corporate bloodletting, ousting its once-celebrity chief executive, Carlos Ghosn, and trying to extricate itself from a complex relationship with French manufacturer Renault. Additionally, Nissan hasn't built the right kind of cars at the right time. In the United States, the lack of sufficiently appealing hybrid models has led to stagnating sales. Meanwhile, in China, Nissan has failed to produce enough electric vehicles, allowing domestic competitors to dominate with advanced EV technologies."
(02:48)

Leggett highlights that these missteps have culminated in a $4.5 billion loss last year, necessitating the current cost-cutting measures, including the substantial layoffs and factory closures.

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Executive Commentary: CEO Ivan Espinoza's Strategy

Ivan Espinoza, in his brief tenure of six weeks as CEO, outlines a radical reset aimed at revitalizing Nissan:

"We are going for a reset, we are going to cut costs and we are now going to invest in products that people actually want to buy."
(03:55)

Espinoza faces additional challenges, including the impact of 25% U.S. tariffs on automobiles, which significantly increase Nissan's operational costs in one of its major markets.

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Global Market Update

Chinese Shares and US-China Tariff Truce

Chinese stock markets saw a slight uptick following an initial surge from a US-China tariff truce. However, investor sentiment soon turned cautious, pondering the sustainability of this temporary peace. Concurrently, Japanese tech giant SoftBank reported robust annual profits nearing $8 billion, marking its first full-year profit in four years, driven largely by substantial investments in artificial intelligence.

Impact of Tariff Cuts on Online Retailers

President Trump's recent decision to reduce tariffs on small packages from China and Hong Kong has significant implications for online retailers. Tariffs have been lowered from 120% to 54%, a move expected to benefit companies like Shein and Temu. However, both companies face challenges:

• Shein has raised prices in response to the tariff adjustments.
• Temu ceased direct sales from China to the United States post-tariff changes.

"But it is important to remember that those Chinese online retail giants like Sheen and Timu, they had previously enjoyed the exemption of any import taxes so they could actually ship low value items below 800 USD directly to customers in the United States. But Mr. Trump closed that rule and that prompted Temu, for example, to stop selling goods directly from China to the United States. And also Shein has hiked prices. While what we don't know is whether or not this latest announcement means that those companies will change their strategies, though of course, 54% is still much higher than what they used to enjoy."
(05:33)

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Geopolitical Developments

China's Call for Latin American and Caribbean Unity

Chinese President Xi Jinping has called for solidarity among Latin American and Caribbean leaders to resist what he terms "global bullying," particularly in the context of unpredictable U.S. trade policies. Xi emphasized the importance of these regions in reducing reliance on U.S. trade by seeking new trading and investment partnerships globally.

“There are no winners in tariff wars. Bullying or hegemonism only leads to self-isolation.”
(06:31)

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Africa's Debt Crisis: Focus on Kenya

The episode also sheds light on Africa's escalating debt crisis, with a particular emphasis on Kenya. Financial analyst Ali Khan Sachu discusses the nation's precarious position:

“Clearly, if you're spending $0.80 of each dollar you're raising on servicing debt, you're very near the line, as it were. And I think Kenya escaped crossing that line because of tremendous support from the IMF and the World Bank under the Biden administration, where the Biden administration was looking for support from African countries. And the challenge for the Kenyan government was some of the conditionalities that the IMF was attaching to the lending was raising taxes. Raising taxes became very unpopular. So the government has now made the decision that it's not prepared to raise taxes because, you know, most governments want to stay in power. And they don't fancy being chucked out.”
(07:19)

Kenya faces increasing pressure as rising repayments and soaring interest rates exacerbate its financial challenges, with the IMF currently assessing the country's debt burden.

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Closing Segment: Climate Conscious Investing

The report briefly touches upon the state of climate-conscious investing, noting a shift away from Wall Street's initial enthusiasm five years prior, due to opposition from sectors aligned with oil interests.

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Conclusion

Today's Marketplace Morning Report underscores the turbulent landscape faced by major corporations like Nissan amidst global economic pressures and shifting market demands. Coupled with significant geopolitical maneuvers and financial crises in emerging markets, the episode paints a comprehensive picture of the challenges and strategic pivots shaping the global economy.

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For more insights and detailed analyses, visit Marketplace.org.

Transcript

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[Marketplace News Host]

Japanese car giant Nissan slashes thousands of jobs after dismal results. Good morning. You are listening to the Marketplace morning report and we're live from the BBC World Service. I'm Liana Byrne. So Nissan is slashing 20,000 jobs worldwide and shutting seven seven factories as it struggles with plunging sales, especially in China and the U.S. it's a dramatic move from its new boss, Ivan Espinoza, who took charge last month. Here he is speaking at a press conference a short time ago.

[Ivan Espinoza]

Our full year financial results are a wake up call. The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging. Hence, Nissan must prioritize self improvement with greater urgency and speed.

[Marketplace News Host]

Now, Nissan is already deep in the red, losing $4.5 billion last year. So what's gone wrong? The BBC's Theo Leggett has been following this one hi, Theo.

[Theo Leggett]

Hello, Liana.

[Marketplace News Host]

So those are eye watering numbers. 20,000 jobs, that's 15% of the company. How did Nissan end up in such a poll?

[Theo Leggett]

Arguably, in the last decade, Nissan took its eye off the ball. It seemed to be more focused on corporate bloodletting, ousting. Its once celebrity chief executive, Carlos Ghosn, tried to extricate itself from a complex relationship with a French manufacturer, Renault, and basically didn't build the right kind of cars at the right time. So that brings us to where we are now, where its two biggest markets. It's got problems in the United States. It basically hasn't built enough hybrids that people want to buy. So sales there have been struggling. And then in China, which is its biggest market, it hasn't made enough electric vehicles. And it's been overtaken by domestic players who've invested very heavily in high tech electric technologies. The end result is that the company has been losing a lot of money. Its headline loss for last year was four and a half billion dollars. And it's having to cut costs and that includes cutting back on staff. So 20,000 staff to go and seven out of 17 factories to shut. We don't know which factories are going to close yet.

[Marketplace News Host]

Now, Ivan Espinosa, he's only been CE for six weeks. So what radical reset is he promising?

[Theo Leggett]

Well, I think this is it. We had the announcement last year that Nissan would be cutting back considerably, getting rid of 9,000 jobs. He said no more radical surgery is needed. I think this is Mr. Espinoza coming in and making his mark on the company, saying, we are going for a reset, we are going to cut costs and we are now going to invest in products that people actually want to buy. At the same time, of course, he's facing a big headache, which is uncertainty over the tariffs introduced by the administration of Donald Trump in the United States. At the moment, for automobiles, Those stand at 25%. That's a big extra cost for Nissan.

[Marketplace News Host]

All right, the BBC. Theo Leggett, thanks for joining us in Marketplace.

[Theo Leggett]

It's a pleasure.

[Marketplace News Host]

Okay, let's do the numbers. Chinese shares edged slightly higher today after an initial boost from the US China tariff truce gave way to investor caution. But how long peace might last? Meanwhile, Japanese tech giant SoftBank announced strong annual profits of nearly $8 billion, its first full year profit in four years, driven by big bets on artificial intelligence. Now, if you've ever ordered clothes or gadgets online from China, this next story might just save you some cash. President Trump has cut tariffs on small packages sent from China and Hong Kong into the US dropping them from 120% down to 54%. The move comes just hours after America and China agreed to pause their trade battle and restart talks. This is big news. Chinese retailers like Shein and Temu, as the BBC's Mariko Oi explains, it is a huge cut.

[Mariko Oi]

But it is important to remember that those Chinese online retail giants like Sheen and Timu, they had previously enjoyed the exemption of any import taxes so they could actually ship low value items below 800 USD directly to customers in the United States. But Mr. Trump closed that rule and that prompted Temu, for example, to stop selling goods directly from China to the United States. And also Shein has hiked prices. While what we don't know is whether or not this latest announcement means that those companies will change their strategies, though of course, 54% is still much higher than what they used to enjoy.

[Marketplace News Host]

Mariko Oi reporting. And speaking of China, Chinese President Xi Jinping has urged Latin America and Caribbean leaders to stand united against what he described as global bullying at a summit in Beijing. The countries are working to strengthen their ties amid uncertainty triggered by President Trump's unpredictable trade policy. The BBC's more fogerty reports he has.

[Maura Fogarty]

Some sharp words for the U.S. he said there are no winners in tariff wars. He also said bullying or hegemonism only leads to self isolation. So again, no guesses as to who he's referring to. But it is part of President Xi's strategy to become less dependent on trade with the United States looking for new trading partners and investment partners around the world. And he sees Latin America and the Caribbean countries as a key part of that.

[Marketplace News Host]

Maura Fogarty there now. Africa's debt crisis is in focus today as leaders meet in Togo to tackle rising repayments and soaring interest rates. Kenya's financial pressures have become a particular worry with the IMF currently assessing its debt burden. For more, here's Nairobi based economic analyst Ali Khan Sachu.

[Jerry]

Clearly, if you're spending $0.80 of each dollar you're raising on servicing debt, you're very near the line, as it were. And I think Kenya escaped crossing that line because of tremendous support from the IMF and the World bank under the Biden administration, where the Biden administration was looking for support from African countries. And the challenge for the Kenyan government was some of the conditionalities that the IMF was attaching to the lending was raising taxes. Raising taxes became very unpopular. So the government has now made the decision that it's not prepared to raise taxes because, you know, most governments want to stay in power. They don't fancy being chucked out.

[Marketplace News Host]

Ali Khan sat you there. And I'm Liana Byrne with the Marketplace morning Report from the BBC World Service.

[Liana Byrne]

Can we invest our way out of the climate crisis? Five years ago, it seemed like Wall street was working on it until a backlash upended everything.

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So there's a lot of alignment between the dark money, right, and the oil industry on this effort.

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