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The company expects a net loss of 265 billion yen ($2.91 billion) for the year ending March 31, compared with its October estimate of 160 billion yen in net income. It also scrapped its second-half dividend.

Nissan’s sales in the U.S., its biggest market, plunged 31 percent in January as demand for Altima sedans and Xterra sport- utility vehicles dried up. Chief Executive Officer Carlos Ghosn’s elimination of 9 percent of the workforce caps a month in which all of Japan’s carmakers slashed forecasts and Panasonic Corp. and NEC Corp. cut workers.

“The economic storm is wreaking havoc on everyone,” said Yuuki Sakurai general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., which manages the equivalent of $54 billion in assets. “Things could get even worse.”

Car sales in the U.S. have sunk to the lowest level since the early 1980s amid the highest unemployment since 1992, forcing General Motors Corp. and Chrysler LLC to seek government aid. Industrywide sales in Japan fell the most in 35 years last month. The country is headed for its worst postwar recession as factory output slumped in December and unemployment surged.

“We are already in depression, at least for advanced economies,” said International Monetary Fund Managing Director Dominique Strauss-Kahn on Feb. 7.

“Worst Assumptions”

“Our worst assumptions on the state of the global economy have been met or exceeded,” said Ghosn. Declining consumer confidence and lack of access to credit are “the most damaging factors,” he said.

The carmaker will slash its workforce to 215,000 from 235,000, matching the magnitude of cuts announced by NEC last month. Of the job losses, 60 percent will come in Japan.

“Japan has been used to a private social contract between the biggest companies and their employees,” said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. That social contract is basically being broken.”