Nissan will cut 12,500 jobs after its profits plunged 99%

Nissan warned last quarter that it was at "rock bottom." Now it's even more clear that its problems aren't going away anytime soon.

(CNN) — Nissan warned last quarter that it was at “rock bottom.” Now it’s even more clear that its problems aren’t going away anytime soon.

Japan’s second-biggest automaker on Thursday said profits were almost completely wiped out in the first quarter of its fiscal year. Operating profit plunged 99% in the quarter compared to a year earlier.

Revenue, meanwhile, dropped nearly 13% compared to a year ago.

Nissan said it will slash roughly 12,500 jobs from its workforce worldwide. That’s more than twice as many as the company was reportedly expecting to cut in May.

The company added it will reduce its product lineup by at least 10% by the end of the fiscal year 2022.

“This is a crude description, but loss-making overseas facilities would be the main targets,” CEO Hiroto Saikawa said during Thursday’s earnings presentation. He also revealed that the company had already suspended manufacturing lines in Indonesia and Spain.

Saikawa declined to specify other locations that will be affected by the cuts. Earlier this year Nissan ended the production of two luxury vehicles in the United Kingdom, dealing yet another blow to an industry that has been rocked by weak sales and fears over Brexit.

Nissan, like other global carmakers, faces severe challenges. A sluggish global economy has hurt sales, and the US-China trade war remains a big risk for manufacturers. New emission standards, driven in part by the climate crisis, have also disrupted the industry.

But Nissan has also been grappling with problems of its own. It has been losing market share in the United States and Europe. In the first quarter, for example, the company sold 351,000 units in the United States, giving it 7.9% of the market. It had 8.1% a year earlier.

Nissan sales in Europe, including Russia, fell more than 16% in the quarter compared to a year ago.

The company is also still trying to move on from the dramatic arrest last year of former chairman Carlos Ghosn, whose legal troubles in Tokyo are far from over.

Though he has denied the charges against him, Ghosn’s indictments have placed enormous strain on the alliance he created between Nissan, Renault and Mitsubishi Motors. All three companies have renewed their commitment to the partnership, but the tensions have not gone away.

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