As the camera market continues to shrink, Nikon is closing two lens Japanese factories. The two factories in question manufacture interchangeable lenses for Nikon digital cameras.
According to Nikkel, Nikon is closing the Nagai Plant in Nagai City in the Yamagata Prefecture and the Aizu Plant in Tadami Town in the Fukushima Prefecture. These two factories will cease operation in March and officially close in August. Nikon plans to consolidate its operations into its lens factory in Otawara City, the last remaining Japanese factory owned by Nikon. Nikon will ask its 108 employees working at the Nagai factory and its 54 employees at the Aizu factory to move to its factory in Otawara City. Additionally, a Nikon spokesperson said Nikon “will support reemployment” if any of its employees are unable to move.
Nikon consolidates to cut operation costs
Reacting to the market shrinking, Nikon plans to cut its operating cost by 59 percent in the next two years. How will this ambitious goal be achieved? Nikon will consolidate its various camera manufacturing into one factory. The company already did this to its Japanese camera factories. Nikon moved all its camera manufacturing moved out of Japan and relocated it into its Thailand factory. However, Nikon will continue to manufacture lenses in Japan and Thailand since Otawara City is in Japan. So, Nikon will still make lenses in Japan for the foreseeable future.
Nikon is in a dire position right now. Having experienced its potentially worst financial year, Nikon will likely show a net loss of $720M loss in 2020 alone. While a 59% reduction in operating costs will be hard for Nikon to attain, it may be necessary if Nikon wants to turn things around. So, it is very likely Nikon will be making more operations cuts soon.