Major Japanese corporations are rapidly expanding early retirement and voluntary resignation programs to reshape an aging workforce. With population aging, labor shortages, and intensifying global competition overlapping, assessments say corporations have effectively abandoned the lifetime employment practice and embarked on restructuring.
Citing data from Tokyo Shoko Research, Bloomberg News reported on the 14th (local time) that as of on the 10th this year, 11,045 employees at Japanese listed corporations had been designated for early retirement, the highest level since 2021. More than 90% of those targeted belong to companies listed on the Tokyo Stock Exchange Prime market, with concentrations in manufacturing and consumer sectors such as electrical equipment, food, metal products, and machinery.
Most early retirement programs are aimed at mid- to late-career employees aged 50 and older. Japanese corporations, which traditionally guaranteed lifetime employment, are squarely moving to reorganize their workforce to reduce the burden of older workers and boost productivity. With falling birthrates, an aging population, and rising life expectancy sharply increasing labor costs, each corporation faces growing pressure that it is difficult to operate organizations in the conventional way.
Some corporations are introducing measures to utilize older workers, such as raising the mandatory retirement age to 65, but they judge that workforce reductions are inevitable to secure profitability. Large corporations including Mitsubishi Electric, Mitsubishi Chemical Group, and Meiji Holdings are actively encouraging early retirement by offering retirement packages to employees in their 50s. The Tokyo Chamber of Commerce and Industry analyzed that this is a measure by corporations to increase the mobility of mid-career workers to maintain competitiveness in a rigid labor market.
Iwai Shintaro, an economist at Dai-ichi Life Research Institute, said, "Japanese corporations can no longer sustain their businesses the way they did in the past," and noted, "The structure is being reorganized to reduce overlapping tasks and raise productivity and efficiency."
The early retirement trend has not been limited to corporations with poor results. Of the 41 corporations that introduced early retirement programs this year, 28 carried out workforce reductions even while posting profits. The fact that 77% of those laid off came from these profitable corporations shows how strong the restructuring drive is across Japanese corporations. Even Meiji and Olympus, which generate stable revenue, are cutting staff in the same vein.
Experts see this trend not as short-term expense cuts but as a structural shift across the Japanese labor market. While the labor market is rapidly pressured by super-aging, global competition is intensifying and the need for digital transformation is growing, making it difficult for corporations to maintain high-cost mid- to late-career workers.
Activist investors and the Tokyo Stock Exchange are also cited as drivers of the spread of early retirement by emphasizing "capital efficiency" and "shareholder returns" and ramping up pressure on corporations. Analysts say Japanese corporations are moving to slim down organizations and reduce unnecessary headcount to bolster share prices and improve return on equity (ROE).
Industry observers expect the increase in early retirement to have a dual impact on Japan's labor market going forward. In the short term, it can increase labor mobility and strengthen corporate competitiveness, but there are also concerns that in the medium to long term, challenges with reemployment for older people and the burden on the social safety net could grow.