Job cuts surge as Japan Inc rebalances aging workforce
A WAVE of voluntary and early retirement programmes in Japan is on track to hit a four-year high, as companies from Panasonic Holdings to Japan Display try to balance an aging workforce with the need to boost competitiveness.
In all, 11,045 employees were targeted for early retirement at publicly listed companies this year as of Nov 10 - the highest since 2021, according to data from Tokyo Shoko Research.
More than 90 per cent of those employees work for companies listed on the Tokyo Stock Exchange’s Prime Market, particularly in the electric equipment, food, metal products and machinery sectors.
These programmes overwhelmingly target employees aged 50 and above, marking a shift away from Japan’s traditional lifetime employment model. The redundancies are unfolding against the backdrop of demographic pressures - shrinking birthrates, an aging population and longer life expectancy.
While many employers are extending retirement age to at least 65, it’s far from universal. Others are actively encouraging early exits as part of broader restructuring efforts.
Companies such as Mitsubishi Electric, Mitsubishi Chemical Group and Meiji Holdings are offering retirement packages to older staff. These moves are aimed at strengthening competitiveness in a tight labour market that’s increasingly favouring mid-career mobility, Tokyo Shoko said.
“It’s no longer feasible to operate on a business-as-usual basis,” said Shintaro Iwai, an economist at Dai-ichi Life Research Institute. “The focus is on eliminating redundant tasks to boost productivity and efficiency.”
Activist investors and the Tokyo Stock Exchange are demanding stronger returns, prompting companies to cut costs and unlock value.
Even profitable firms are not immune - 28 of the 41 companies implementing retirement programs this year reported profits, and 77 per cent of the job cuts came from those firms, the data showed.
Meiji and Olympus Corp. are among those cutting jobs despite healthy earnings. BLOOMBERG
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