After cutting its annual profit outlook by 70% to $975 million in November, one of the largest automobile manufacturers in the world is bracing for an even tougher 2025.

Nissan Motor Corporation is planning to lay off thousands of workers and reduce global manufacturing capacity as it tries to cut costs by $2.6 billion in the current fiscal year, according to a Reuters report.

Once a leader in electric vehicle (EV) sales as far back as 2018, Nissan has seen its fortunes turn bad after a string of rapid developments. In China, a bitter price war among Chinese EV brands has seen BYD come out ahead while American, Japanese, and European brands struggle to keep up. As of this month, BYD is on course to surpass its sales target of 4,000,000 vehicles, with more than 90% of these sold in China alone.

Nissan, on the other hand, has seen a troubling decline in global sales. From as high as 5,770,000 units in 2017, sales have gone down to 3,442,000 in fiscal year 2023, recovering slightly from the lowest point of 3,305,000 in 2023. Net income, however, went down to negative 9,000,000,000 yen in the second quarter of this year as the full impact of its strategic blunders is only now being felt.

For the first half of fiscal year 2024, global sales have fallen 3.8% to 1,590,000 units. China sales alone accounted for a 14.3% drop. In the US, sales have fallen to just 449,000 vehicles. The US and China markets account for nearly half of Nissan’s global sales.

With cash reserves running low, an unnamed, high-ranking official at Nissan said that it is in “emergency mode,” and may only have 12 to 14 months to make drastic changes and survive, as reported in the Financial Times.

Aside from the ultra-competitive environment of the Chinese market, which has seen Chinese brands pour out new technology and models faster than the Japanese, Nissan also blundered in the US market, going all-in as far as battery-electric vehicles (like the Leaf and the Ariya) are concerned, but neglecting to also offer hybrid models.

While Nissan’s hybrid e-Power models have been sold in other markets—the Philippines included—for some time now, even an entry-level Kicks has been unavailable in the US. With the slow rollout of EV charging stations in the US and elsewhere, buyers have been keen to stick with ICE and hybrid models. Nissan plans to launch the e-Power series in the US and Canada only by the end of fiscal year 2026, perhaps a bridge too far by then.

According to CEO Makoto Uchida, who has voluntarily taken a 50% pay cut as part of the belt-tightening measures: “We didn’t foresee HEVs ramping up this rapidly. We did start to understand this trend toward the end of last fiscal year.”

While it doesn’t see an increase in global sales until a new line of hybrid models is made available, Nissan is planning to implement some painful measures. A total of 9,000 workers will be laid-off—around 6.75% of its 133,580 global workforce.

Production capacity will be cut by 20%, and vehicle development time will be shortened to 30 months with more collaboration between Renault and Mitsubishi. Nissan is also selling up to 10% of its stake in Mitsubishi Motors to raise up to 68.6 billion yen ($445.45 million).

Of its 25 vehicle production lines across the globe, maximum capacity will be reduced by changing line speeds and shift patterns. This signifies that Nissan does not see itself recovering in the short term, instead focusing on cutting costs where possible to mitigate the financial hemorrhage.

With US president-elect Donald Trump’s latest announcement of a proposed 25% across-the-board tariff on Mexico, the news could not have come at a worse time for Nissan, which manufactures cars in that country for export to the US.

As the company prepares to swallow some very bitter pills, one has to wonder if Uchida will see the end of it.

Carlos Ghosn, Nissan’s former chairman, was arrested in 2018 on alleged financial misconduct, and is currently hiding somewhere in Lebanon. Hiroto Saikawa, who took over from Ghosn, stepped down only a year later after admitting to receiving excess pay. Chief operations officer Ashwani Gupta and two outside directors left in 2023. Chief financial officer Stephen Ma is set to step down soon, too.

For Uchida and Nissan, the clock is ticking.