Shigeyuki Terao, a branch manager at brokerage Tokyo Securities Co., has his share of problems. Thanks to the stock market plunge, commissions in his office are half what they were, and accounts are off 70%. Only 2 of his 20 salesmen are covering costs. "If this were America, I'd fire one-third of my staff," Terao says.
But this isn't America, so no such drastic moves are likely, even though the economy is wilting and the pressure is on. Japanese companies are struggling to manage what are suddenly too many workers. As recently as March, 1991, there were 1.5 jobs for every worker in Japan. Now that ratio has dropped to nearly 1 to 1. And for the first time in six years, the total work force decreased in the April-to-June quarter, by 0.1%. "It has turned serious," says Shoichi Kojima, director of domestic research at the Economic Planning Agency. "The economic slowdown has finally reached the labor market."
BUSY WORK. So far, Japanese-style cutbacks have been mild, compared with massive layoffs in the U.S. by Detroit's Big Three, Wall Street firms, and others (table). Hitachi Ltd. will "lay off" 2,200 VCR factory workers for up to three days a month beginning in September--at 90% pay. Toyota is slashing overtime and accelerating its training program for foremen to give them something to do on slack days. In April, Dai-Ichi Kangyo Bank Ltd. launched a campaign to hustle people out of the office by 7 p.m. Yamaichi Securities Co. will transfer 140 administrators to retail offices, and Fujitsu Ltd. will send 100 development engineers to sales and marketing next month. In recent weeks, brokerage Nomura Securities Co. and Oki Electric Industry Co. have announced cutbacks in hiring.
Such cuts may be only the beginning. Masaru Takagi, economist with Fuji Research Institute, estimates some 800,000 workers are twiddling their thumbs. If these kigyonai shitsugyosha, or in-house unemployed, were counted, they would push Japan's unemployment rate up to 3.4% from the current 2.1%, he says.
It's the "bubble economy" of the late 1980s haunting Japan again. When growth blasted ahead at 5% annually at the end of the decade, some employers got carried away and signed up too many workers. To entice new graduates, companies spent lavishly on new dorms for employees and offered frills such as matchmaking services. Now the party's over.
Worst hit, as usual, are part-time workers. As the traditional shock absorbers for downturns, they are the first to get the heave-ho. At Nissan Motor Co., part-timers were slashed to 1,600, from 3,500 in 1991. Gains by women are eroding quickly, too. As labor grew tight over the past few years, women were catapulted into positions of responsibility as never before. In 1991 and 1992, for example, 10% of Nomura's nonclerical new hires were women. But of 180 new hires for next year, only five are women. And foreign laborers, who took the dirty jobs spurned by the Japanese, are finding the welcome mat of the past years yanked away.
PROMISES TO KEEP. Still, many Japanese aren't giving up their pledge to provide lifetime employment--at least not yet. "If we get a reputation for firing people, we'll never be able to hire top talent again," warns Kigen Miwa, systems engineering manager at Fujitsu. One Nomura manager estimates only 30% of the company's 2,700 sales representatives are breaking even, but they won't be let go. "We're just going to hang on until the economy picks up again," he says.
Many employers continue to keep their eye on a labor shortage predicted by the end of the decade. Birth rates have dropped sharply, and the Labor Ministry warns that Japan's work force will peak around the year 2000 and then drop steadily. In fact, anyone who says the labor shortage is over, says Toyota Motor Corp. personnel manager Chimaki Kurokawa, "is an idiot." He's looking into extending retirement age from 60 currently, along with other long-range moves. But if economic growth, a listless 2%, slows any more, the long term will seem very far off indeed.
CUTTING THE PAYROLL, JAPANESE STYLE HITACHI Starting in September, 2,200 workers in VCR production will be sent home for up to three days each month at 90% pay NISSAN MOTOR Part-timers slashed to 1,600 from 3,500 in 1991 NOMURA SECURITIES Paring staff by one-sixth, or 2,000 positions over three to five years SANYO ELECTRIC Shifting 100 administrative people to sales DATA: BW