Sixty percent of Japan firms looking at job cuts

Reuters, Tokyo

In a reflection of grim Japanese economic conditions, some 60 percent of major companies responding to a survey said they were eyeing job cuts over the next two years.

The survey, conducted by the daily Mainichi newspaper and released on Saturday, suggests that Japan's already high jobless rate, which hit a record 5.3 percent in September, is likely to worsen still further.

The survey, which polled some 102 leading companies over a broad range of sectors, also found that more than 60 percent of the firms said that the Sept.11 attacks on the United States had contributed to their poor situation.

The firms surveyed included, among others, construction firms, automobile makers, retailers, and several financial firms.

Of the companies that said they were eyeing job cuts, some 56 percent said they were likely to rely on "natural causes," such as not replacing retiring workers, for their job cuts.

This was followed by around 18 percent saying they would institute early retirement programs, while some 14 percent said they would spin off employees to related companies.

A stream of gloomy economic data suggests that Japan's jobless rate could worsen in the months ahead.

Figures released earlier this month showed that bankruptcies soared to their highest level in more than 17 years in October.

And 15 economists polled by Reuters last week produced a median forecast of 5.4 percent for unemployment in October.

The employment report is due out at 8:00 a.m. on Friday, Nov.30.

The government is trying to ease the pain of the employment situation through extra spending on employment measures. The bulk of a 3 trillion yen (US$24.35 billion) extra budget decided on earlier this month will go to tackle rising joblessness.