Why Toshiba’s announcement of cutting 5,000 jobs is significant for Japanese companies

Toshiba Corporation, one of Japan’s biggest employers, is set to cut around 5,000 jobs in Japan, representing approximately 10% of its domestic workforce. This move comes as part of the company’s restructuring efforts to streamline operations and focus on core businesses like infrastructure and digital technology. The job cuts are expected to incur a one-time cost of 100 billion yen ($650 million).

The once-giant employer in Japan has been facing financial difficulties in recent years, including management issues and scandals such as accounting irregularities and the sale of its memory chip business, Kioxia, to cover losses from nuclear power plant ventures.

The job cuts at Toshiba are significant in Japan, where layoffs have traditionally been uncommon due to strong worker protection laws. However, the country is currently experiencing a chronic labor shortage, which is lessening the negative impact of these job cuts as companies struggle to fill open positions. Factors like rising wages, increased worker mobility, and a growing number of foreign workers are contributing to a changing workplace landscape.

Other major Japanese companies, including Shiseido, Omron, and Konica Minolta, have also recently announced staff reductions. Despite facing troubled times, Toshiba aims to move past its challenges through a long-delayed $15 billion buyout, which executives believe will provide the company with an opportunity to regain stability.

Toshiba, known for its manufacturing of nuclear turbines, batteries, and quantum computing technology, will offer severance packages to those impacted by the job cuts, according to reports from Nikkei.