More profit-making companies cutting jobs in Japan
An increasing number of profit-making large companies in Japan are trimming their workforces, including through voluntary retirement programs.
Although cutting jobs has been a traditional tactic to boost the finances of loss-making firms, it is now being used by financially strong companies to correct imbalances in workforce composition and make growth sustainable amid fast-paced innovation.
Some experts say the long-held belief in long-term employment among Japanese companies is changing in the face of competition with foreign companies that tend to ax jobs aggressively when this is viewed as necessary.
Between December last year and January this year, Mitsubishi Electric Corp. offered voluntary retirement to workers aged 53 or older, who account for a quarter of the company's total workforce. Those who applied numbered 2,378.
The measure aimed to optimise workforce composition and promote younger employees. Voluntary retirement has also been offered at related companies in Japan, with the total number of applicants across the Mitsubishi Electric group expected to reach some 4,700.
For the fiscal year ending in March, Mitsubishi Electric expects to log a record consolidated net profit.
In the longer term, however, the company faces the challenge of expanding digital services beyond its hardware operations. "We have to utilise personnel capable of addressing this challenge, Mitsubishi Electric President Kei Uruma said.
Meanwhile, some 12,000 workers are expected to leave Panasonic Holdings Corp. on a group basis under its early retirement program, and Olympus Corp. plans to cut some 2,000 jobs. Both companies anticipate black-ink results.
According to Tokyo Shoko Research Ltd., 43 listed companies solicited early or voluntary retirement last year. Of them, about 70 per cent were profitable.
"Technological innovation is taking place fast in the manufacturing sector," Koji Hayashi, a principal in the research and consulting division of Japan Research Institute Ltd., said. "If companies don't replace old workers with new ones rapidly, they will get into trouble."
Hayashi expects the trend of job cuts by companies in the black to continue.
Voluntary retirement programs are not necessarily well-received, although many companies offer favourable terms such as increased retirement allowances. The job market for older workers has become more dynamic, but they often have difficulties landing jobs they want.
Hayashi sees a shift in belief in long-term employment among Japanese companies, mainly due to intensifying competition with foreign companies and the wider introduction of so-called job-based employment systems, in which salaries are paid based on the clearly defined content of jobs.
"It's important for companies to explain fully why they are implementing voluntary retirement programs, while offering those who quit adequate help to find new jobs," Hayashi added.
[Copyright The Jiji Press, Ltd.]
