Oct. 3 (Bloomberg) -- Toyota Motor Corp., the world's second-largest automaker, reduced its temporary workforce by 23 percent in Japan in the six months through September, as demand for new vehicles slumps in the U.S. and its home market.

The number of contract positions fell to 6,800 in September on average from 8,800 in March to respond to a change in demand, spokesman Hideaki Homma said today by phone. The company froze the hiring of new temporary workers from the end of June.

The Toyota City, Japan-based automaker in July cut its production estimate by 4.5 percent to 9.5 million vehicles for this year because of weaker demand in its major markets. Toyota's U.S. sales fell 32 percent last month, the biggest monthly decline in two decades.

Nikkei English News reported the Toyota job cuts earlier today.

Toyota fell 6 percent to 4,050 yen at the 11 a.m. trading break on the Tokyo Stock Exchange.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net.

Last Updated: October 2, 2008 23:04 EDT