NISSAN Motor Co.’s struggle to cope with tougher car industry conditions and address weaknesses within its business has spiraled, leaving the automaker with no choice but to slash payroll, production and its forecasts for this fiscal year.

The Japanese company will dismiss 9,000 workers globally and reduce capacity by a fifth, among other cost-cutting measures, after net income plummeted 94% in the first half. Nissan also will sell off some of its stake in Mitsubishi Motors Corp. after burning through ¥448.3 billion ($2.9 billion) in cash during the last six months.

The calamitous results will prove costly for Chief Executive Officer Makoto Uchida, who’s forfeiting half his compensation starting this month. The CEO told investors Nissan has been affected “not only by external challenges, but also by our specific issues,” alluding both to the breakneck rise of Chinese automakers and Nissan setting overly ambitious sales targets.

“Meeting our sales goals will be a challenge,” Uchida said. “We need to rebuild our strength so that we can pivot toward a more positive direction.”

Nissan now sees its operating income plunging to just ¥150 billion in the fiscal year ending in March, down 70% from its previous forecast. Management also lowered their revenue outlook by more than 9%, meaning they now expect virtually no growth for the year.

Uchida has been at the helm since 2019, when Nissan was facing an existential crisis in the wake of former chairman Carlos Ghosn’s departure. He’s had trouble righting the ship while facing stiff competition from the likes of Tesla Inc. and China’s BYD Co., rendering the company a laggard among major Japanese automakers.

“Nissan is the weakest one,” said James Hong, an analyst at Macquarie Securities Korea. “The only way for the company to improve sales is through price cuts.”

Nissan will sell almost a third of its shareholding in partner Mitsubishi Motors, paring its current stake of just over 34%. The roughly 10% holding that Nissan will offer up through the Tokyo Stock Exchange was worth about ¥68.6 billion at the close of trading Thursday.

Nissan is around eight months into a three-year turnaround plan meant to reinvigorate the business, though it was already backtracking earlier this year. In July, the company cut its annual operating profit outlook to ¥500 billion, from ¥600 billion due to poor sales in China, Japan and North America.

Profit for the quarter that ended September was ¥32 billion, falling short of consensus estimates for ¥65 billion and further still from the ¥208 billion earned a year ago.

“The decline in second quarter profit wasn’t a surprise, but the figure itself was even lower than expected,” said Bloomberg Intelligence analyst Tatsuo Yoshida. “The main problem is the gap between what the company wanted to achieve, and what was realistically possible.”

The plans Uchida has laid out include expanding Nissan’s lineup of electric vehicles, forging new partnerships and selling an additional 1 million cars a year by 2027. But analysts have said the company’s new lineup lacks excitement and enough hybrid models — a problem when consumer demand for EVs is waning.

“The demand for hybrids is what’s allowing Toyota and Honda to enjoy strong profitability,” Macquarie’s Hong said. “That strategy also needs to be revisited.”

Like many international legacy automakers, Nissan is struggling in China, the world’s biggest car market. In June, the company said it would cease production at a plant in Changzhou amid slumping sales.

Earlier this year, Nissan lowered its production goal for the current fiscal year by 50,000 units to 3.65 million vehicles. With global sales falling almost 4% to 1.6 million units between April and September, reaching that could be a challenge.

In March, the company agreed with Honda Motor Co. and Mitsubishi Motors Corp. to work together on the development of in-house software. This could pit the trio against Toyota Motor Corp. and its alliance with Subaru Corp., Suzuki Motor Corp. and Mazda Motor Corp.

Uchida didn’t offer further details on the alliance Thursday. The job cuts he announced amount to about 7% of Nissan’s workforce. –BLOOMBERG