Japan firms curb jobs, cut wages

- Advertisement -

TOKYO- A majority of Japanese firms said they have taken steps – from lay offs to pay cuts – to cope with the fallout from the coronavirus pandemic on the world’s third-largest economy, according to a Reuters monthly poll.

Japan, like many other countries around the world, imposed lockdowns this year to curb the spread of the virus, crippling economic activity and exacerbating the country’s first recession in 4-1/2 years.

Prime Minister Shinzo Abe has responded with two stimulus packages totalling $2.2 trillion – including payouts to citizens and ailing firms – but over half of the respondents in the poll were critical of the response.

- Advertisement -

Indeed, the latest Corporate Survey showed that many of the companies polled have had to curb hiring, lay off workers or cut pay to manage, dashing hopes for a solid recovery as private consumption accounts for more than half of Japan’s economy.

“The jobless rate will remain on the uptrend as more and more firms will become unable to weather the economic pain,” said Hisashi Yamada, senior economist at Japan Research Institute.

“Given the risk of a second wave of infections, the economy will recover only to a limited extent.”

Out of the 55 percent of Japan firms who saw the pandemic hitting their labor force, two in five said they have curbed new hiring, a quarter slashed pay and another quarter laid off workers, when asked to pick multiple responses, the poll showed.

Meanwhile, only 44 percent of Japanese firms said they appreciated the government’s response to the economic fallout from the new virus, which many criticized as being too slow as it was tied up in bureaucratic red tape, the survey showed.

Author

- Advertisement -

Share post: