Car Industry

Nissan to slash nearly 10% of its global workforce amid record low profits

The Japanese car company posted its worst quarter financially since the great recession.

Nissan is having a bad time. It saw a 99% drop in operating profits thanks to tanking sales around the globe, except in China. There aren't a ton of companies that can weather a storm like this one and survive, but Nissan is going to try.

Nissan CEO Hiroto Saikawa announced on Thursday that the company would eliminate 12,500 jobs globally in an attempt to cut costs. That number represents nearly a 10th of its global workforce and will likely be accompanied by plant closures.

How did things get so bad for what was at one point one of Japan's most successful car makers? Well, the ongoing legal issues with former Nissan boss Carlos Ghosn haven't helped at all. Neither has a global downturn in new vehicle sales, a problem that is worse for Nissan because it has a relatively old model range.

Nissan plans to shrink that aging range by approximately 10%, getting rid of compact cars that aren't selling as well in an SUV and crossover-crazed market. Many of the likely plant closures will come from facilities that make those small cars, and will also likely happen around the world.

"Nissan has already taken steps to rightsize its North America region. We will continue to monitor and react to market demand, but have no plans for further workforce reductions at this time," a Nissan representative said in a statement.

Nissan's profit margin is currently its worst since it posted a loss in March 2008, according to Reuters.

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Originally published July 25.

Update, July 26: Adds comment from Nissan.