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A line worker installs the front seats on the flex line at Nissan Motor Co's automobile manufacturing plant in Smyrna, Tennessee, U.S. The troubled company is expected to formally announce over 10,000 layoffs globally later this week.

William Deshazer/Reuters

Nissan Motor Co Ltd plans to expand job cuts to over 10,000 to help turn around its business, a person with direct knowledge of the matter said on Wednesday, showing the tough road ahead for an automaker grappling with management upheaval.

The global plan includes the 4,800 job cuts announced in May and will mostly be at factories overseas with low utilization rates, the person said. It will be announced along with financial results on Thursday, said the person, who declined to be identified as the information was still private.

Nissan declined to comment. Its shares were up 0.9 per cent in mid-morning trade.

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The cuts, exceeding 7 per cent of Nissan’s 138,000-strong workforce, highlight the extent of problems facing Chief Executive Hiroto Saikawa, who is also grappling with fractured relations with French alliance partner Renault SA following the arrest of their shared former chairman, Carlos Ghosn.

Ghosn has been charged with financial misconduct and denies wrongdoing.

Saikawa kept his job in a vote at an annual shareholders meeting last month, though he had to fight off a rare rebuke by top proxy advisory firms who urged shareholders not to reappoint him considering he was groomed for leadership by Ghosn.

Of note, Saikawa has been struggling to halt falling sales in the United States, one of its biggest overseas markets, where it has been paying high sales incentives to dealerships.

In May, Nissan forecast a 28 per cent plunge in annual operating profit, adding to a 45 per cent fall in the previous year, putting the automaker on course for its weakest earnings in 11 years.

While addressing faltering performance, Saikawa also has to repair trust with Renault, which has deteriorated in past months as the French automaker sought more control within Nissan.

Renault owns 43 per cent of the Japanese automaker, which in turn holds a 15 per cent, non-voting stake in its partner. Saikawa, who has sought more equal footing with Renault, last month said Nissan would postpone discussions on the alliance’s future to prioritize performance.

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The extended job cuts were first reported by Kyodo late on Tuesday.

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