Japan Company Retirements: Updated May 7, 2024.

 

Early, voluntary retirement offers accelerate among Japan companies as wage hikes mount

Article Source:  https://mainichi.jp/english/articles/20240427/p2a/00m/0na/016000c

But what an unfortunate situation that companies are asking for some to retire to increase wages!

Ideas:

Many years ago, labor or workers were not really considered a fixed cost and were considered a valuable stakeholders. But today, it seems Japanese companies have transitioned into western style companies with layoffs, early and voluntary retirements, which probably are not really voluntary.

Unfortunately, Japanese companies have been under pressure to increases wages, but they only have so much room in their profits margins, so maybe a combination of increased prices and so-called voluntary layoffs to keep the profit margins in the black.

And of course they have to keep the all important shareholder happy so they forget about their valued workers and focus on the bottom line, and like western companies just layoff their workers.

Again, many years ago the late Peter Drucker, the famous management consultant, always talked about how workers or labor were important stakeholders in a company and should not be considered as a fixed expense. 

At the time, many US companies didn't like his advice so he took his ideas to Japan and Japanese companies liked his ideas about employees being stakeholders and so they treated their employees as important stakeholders for many decades.

But these days, again, those days seem a long time ago and the norm in Japan is layoffs and early retirements and keeping the shareholder happy.

Its quite possible, that maybe some investment firms, which have become a part of some large Japanese companies are driving the early retirement focus, as maybe companies really don't want to do it but a group of shareholders related to the investment firms are forcing companies to layoff and or force early retirements.

For example, as I had contact with large engineering and construction company, the CEO said the worst part of his job is/was dealing with shareholders and investment companies.

It seems that investment companies only have one strategy to reduce costs and that is to layoff workers and or force early retirements.

Maybe the idea of "life-time employment" in Japan is now dead and or its been dead since the asset crash of 1989/1990, which Japanese companies for noted for, or at least the large companies.

Have a nice day and be safe!