Nissan Motor Co. assembly line employees work on the Nissan March at a plant in Yokosuka, southwest of Tokyo. (Shuji Kajiyama/Associated Press)

Nissan sank into a loss for the fiscal third quarter and forecast its first full-year loss in nearly a decade on Monday, forcing Japan's third-biggest automaker to slash 20,000 jobs, or 8.5 per cent of its global work force.

"The global auto industry is in turmoil, and Nissan is no exception," chief executive Carlos Ghosn told reporters in Tokyo.

Nissan Motor Co. now expects a 265 billion yen ($3.6 billion) net loss for the fiscal year through March — the first time in nine years it's tumbling into an annual loss.

The automaker reported a net loss of 83.2 billion yen for the October-December period, a reversal from the 132.2 billion yen profit it earned the same period the previous year. That was its first quarterly net loss since it began reporting quarterly earnings in 2003.

As one key step in response to the dismal results, Ghosn said Nissan's global workforce will be reduced by 20,000 through March 2010, to 215,000 from 235,000. The company has not specified which plants will be affected.

Directors on the board will forgo bonus pay for the year ending March. Their salaries, as well as the salaries of corporate officers, will be reduced by 10 per cent, while managers' salaries will be reduced by five per cent, the company said.

Nissan sold 731,000 vehicles worldwide in the quarter ending Dec. 31, down 18.6 per cent from the same period a year earlier.

Other Japanese carmakers also hit

Like other Japanese automakers, Nissan has been battered by the global slump and the U.S. credit crunch, which has undermined sales in its vital North American market. A strong yen also ate into profits by eroding overseas earnings when converted back to yen.

On Friday, Toyota predicted it was heading for its first annual loss since 1950. The world's largest automaker also reported a fiscal third quarter loss of 164.7 billion yen ($2.2 billion), down sharply from the 458.6 billion yen profit it had the same period the previous year. Smaller automakers Mitsubishi Motors Corp. and Mazda Motor Corp. have already projected losses for the fiscal year.

But Honda Motor Co., Japan's second-biggest automaker, expects to stay in the black for the year through March at 80 billion yen profit, though that's down 87 per cent from the record 600 billion yen the previous year.