Nissan offers buyout to salaried employees after rough quarter

Author

Colin Velez
August 06, 2024

Nissan is offering a voluntary severance program to select workers after posting a massive decline in quarterly earnings, driven by heavy incentives and marketing costs.

Why this matters: This marks the second automaker in as many weeks to introduce a job-cutting measure after a less-than-ideal quarter. But while Nissan’s predecessor, Stellantis, implied that layoffs may be on the table if too few take its sweeping voluntary offer, the Japanese company’s own program is only open to a small group of employees.

Driving the news: The car manufacturer extended the voluntary separation offer to salaried workers at both Nissan and Infiniti.

  • Non-manufacturing staff members age 52 or older and manufacturing staff age 55 are eligible for the offer.

  • Like Stellantis, Nissan has not confirmed a job reduction target, according to Automotive News, which broke the story this morning.

  • Hourly employees are not eligible for the buyout.

Between the lines: The update comes hot on the heels of the company’s most recent quarterly earnings report, which revealed a sharp decline in profitability and changed Nissan’s full-year guidance from roughly $2.63 billion down to $2.08 billion.

  • While revenue rose about 3% year-over-year, operating profit declined more than 99%, falling from $888 million to $7 million. This effectively left the brand with an operating margin of 0%.

  • The automaker still generated about $197.8 million in net income, but that’s 73% lower than in 2023.

Zooming in: Although Nissan expects its earnings to recover in the coming months, it attributed the quarter’s poor performance to incentives, implemented to offset “intense sales competition” from rivals, and inventory optimization.

Bottom line: It seems that Q2 served as a wake-up call for multiple automakers that the days of profit without volume are long gone. Automakers like Nissan and Stellantis must now focus on cutting costs to keep their margins steady, all while revising their product lineups to meet the market’s expectations.

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