Over 1,000 Companies in Japan Go Bankrupt Amid Labour Crisis

The number of corporate bankruptcies in Japan exceeded 1,000 cases in July for the second consecutive month, as the labour crisis and rising prices continued to pressure small businesses, local media reported on Monday (10/8), citing a survey by a credit research firm.

According to Tokyo Shoko Research, 1,028 companies went bankrupt in July, up 6.9 percent compared with the same period a year earlier, with total liabilities surging 41.4 percent to 236.3 billion yen (1 yen = Rp113), or approximately 1.5 billion US dollars (1 US dollar = Rp17,913), according to a Kyodo News report.

Bankruptcies triggered by the labour crisis reached a record high of 63 cases, including 36 caused by soaring personnel costs, double the figure from a year earlier. Meanwhile, cases rooted in rising prices reached 93, the highest since 2022, as the weakening yen pushed up material and raw material costs, the report said.

By industry, the services sector recorded the highest number of bankruptcies with 342 cases, while the information and communications sector saw a 62.5 percent jump in failures, including software-related companies affected by the growing use of artificial intelligence (AI).

Small-scale companies with liabilities below 100 million yen accounted for nearly 80 percent of the total bankruptcies.