Nikon shrank 20% of its workforce in 2020, bet on premium mirrorless, and doubled profit

By 2020 Nikon's camera business was collapsing: smartphones had killed the compact-camera and entry-level DSLR markets, and COVID froze what was left. In its Q2 FY2021 results Nikon reported a $183.3 million operating loss, with interchangeable-lens camera sales down 31% year on year and compact cameras down 73%.

In November 2020 Nikon's management chose surgery over drift: it would cut more than 2,000 workers outside Japan — about 20% of its international workforce — move production from Miyagi to Thailand, and slash operating costs by more than ¥80 billion, while concentrating the product line on mid-to-high-end mirrorless cameras for professionals and hobbyists, led by the flagship Z9.

The bet worked. For the fiscal year ended March 2023, Nikon's imaging revenue rose 28% and operating profit 122%, delivering a record-high operating margin; mirrorless models went from a minority to 80% of camera sales, and the Z8 and Zf drove further double-digit growth into FY2024's first half.

By FY2023, imaging revenue rose 28% and operating profit 122%, with a record-high operating margin; mirrorless reached 80% of sales.

The shrinking market punished volume players, so Nikon cut 20% of overseas staff and consolidated production before demand could erode further.

Professionals and hobbyists kept buying premium gear even as casual buyers left, so higher average selling prices replaced lost unit volume.

Committing fully to mirrorless — the Z9, Z8 and Zf — let Nikon catch up to rivals that had moved earlier.

An ¥80 billion cost-reduction target turned the recovery from a revenue story into a margin story.

When a volume market dies, cut capacity to match and climb upmarket — fewer, pricier products can carry higher margins than the mass market ever did.

The recovery proved fragile. After the FY2023 record, profits faded, and in FY2026 Nikon posted its worst annual loss ever — a net loss of ¥86 billion and a ¥112.4 billion operating deficit — blaming impairments in digital manufacturing, a down-market product mix, tariff-driven price increases and slowing emerging markets.