Nissan to cut 12,500 jobs worldwide

The Sunderland plant opened in 1986

Japanese car giant Nissan has said it will cut 12,500 jobs around the world, more than double the amount previously announced.

It will reduce its production capacity and the number of models it produces by 10% by the end of 2022, but it did not say where the cuts will fall.

It comes as the firm tries to shore up its finances amid weakening sales.

Union sources said they were hopeful Nissan's Sunderland car plant would escape the cuts.

In May, it announced job losses of 4,800, which are included in the new total.

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On Thursday, the firm announced a 94.5% fall in net profit for the first quarter of 2019 - one of its worst quarterly performances in a decade.

Nissan has been struggling in the US, a key market, where it has been heavily discounting to keep up with sales by rivals.

It also reported first-quarter sales falls in Europe, Asia and Oceania, Latin America, the Middle East and Africa.

The firm is reining in its operations after years of expansion under former chairman Carlos Ghosn, who was ousted last year after being accused of financial crimes.

In a news conference, chief executive Hiroto Saikawa said the job cuts would account for a "big portion" of the savings it was trying to make.

Of the 12,500 job losses, 6,400 have already been implemented at eight locations, he said.

Nissan plans to shed another 6,100 jobs between the 2020 and 2022 financial years at six locations.

He did not specify which models would be targeted for production cuts, but said they would be likely to affect "compact cars and its Datsun range".

The cuts will fall on unprofitable models, Mr Saikawa added.

Nissan's Sunderland plant makes profitable lines and also manufactures the Leaf electric car. Part of the firm's broader strategy is a focus on electric vehicles.

However, in February it announced it would build its new X-Trail model in Japan, instead of Sunderland, citing business reasons and Brexit uncertainty.

A month later, it said it planned to end the production of two of its Infiniti cars at Sunderland.

Analysis

Theo Leggett, international business correspondent

Battered by scandal, and struggling to curb falling sales, Nissan is taking dramatic steps.

It now plans to cut 12,500 jobs worldwide and close or reduce capacity at up to 14 factories as it tries to reduce excess capacity and cut costs.

In the three months to the end of June, the company made an operating profit of just £12m ($14m), compared with more than £800m ($1bn) in the same period last year - a decline of 98%.

Sales in the US, one of its biggest markets, have declined sharply, while there have also been concerns in Europe.

Last year, the company's former chairman, Carlos Ghosn, was dismissed, following his arrest in Japan on charges of financial misconduct.

He denies the charges and has blamed a conspiracy among Nissan executives for his downfall.