Workers in Japan offered early retirement of over 10,000 as the pandemic dragged on

The number of employees being voluntarily retired by listed companies in Japan has exceeded 10,000 so far this year, three months faster than in 2020, according to a private survey.

Fifty companies have made such offers, and about 70% of them have reported net losses, according to Tokyo Shoko Research Ltd.

A growing number of companies are hiring in the wake of the ongoing coronavirus pandemic. The situation will worsen if the pandemic continues to deprive businesses of their strength, although consumption is likely to rebound as the vaccination ramps up.

Of the 50 companies, eight were apparel and textile companies, the largest share by sector. Electronics manufacturers took second place with seven as they dismantled production facilities and consolidated operations.

Many other companies were tourism, transportation and restaurant companies, all of which were severely affected by coronavirus restrictions such as voluntary restrictions on going out, shop closings and shorter hours of operation.

According to Tokyo Shoko Research, there have been no voluntary early retirement offers in the tourism industry in the past 10 years as the industry boomed with many visitors from abroad.

In the transport sector, including airlines and rail operators, there have been offers of voluntary early retirement for the first time in eight years.

The apparel industry, whose market was already shrinking before the pandemic due to the low birth rate and aging population, has taken an additional blow from temporary department store closures.

World Co. applied for voluntary retirement in March after taking a similar move as recently as September last year. Sanyo Shokai Ltd. repeated offers to retire.

Sanyo Shokai President Shinji Oe said he did not expect the current state of emergency, the third of its kind in the country, to result in department store closings.

At KNT-CT Holdings Co., the operator of Kinki Nippon Tourist’s travel agencies, 1,439 employees, or around 20% of the group’s employees, applied for voluntary early retirement.

The group is pinning its hopes on the expected recovery in domestic travel demand following advances in coronavirus vaccinations.

“We are committed to the survival of the company as a responsibility of those who stay,” said Akimasa Yoneda, CEO of KNT-CT, at a press conference last month.

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