Approximately 80% of companies cut personnel expenses to curb costs, a Cabinet Office survey reveals

At the end of April, the Cabinet Office published the results of a questionnaire survey on corporate activities and behavior for FY2003, which targeted 2,473 listed companies in Tokyo, Osaka and Nagoya. A total of 1,242 companies, comprising 689 manufacturers and 554 non-manufacturers, sent in their responses (response rate: 50.3%).

The survey revealed that 39.4% of companies saw their sales and operating profits increase; 8.3% saw their sales increase but profits decrease; 17.1% saw their sales decrease but their profits increase; and 28.7% saw both their sales and profits decrease. When asked about measures and programs most effective in increasing operating profits, 43.6% of companies cited "reduction in fixed costs," while 24.0% cited "increase in sales volume," 20.7% cited "reduction in variable costs," and 5.7% cited "rise in unit price of sales," showing that, in many companies, cost-cutting contributed the most to an increase in operating profits.

As for specific cost-cutting measures taken by companies, 78.2% cited "curtailing of personnel expenses." Similarly, the most frequently-cited measure that companies found to be the most effective was "reduction of personnel expenses," at 47.9%.

Moreover, results showed a 3.4% decrease in the number of full-time employees over the last three years, while the number of part-time and temporary employees increased by 2.2% over the same period, reflecting a tendency among companies to decrease full-time employees and increase part-time and temporary employees. However, a 3-year outlook predicts this decrease in full-time employees to slow to 0.8%, as compared to a 2.3% increase in part-time and temporary employees over the same period. When asked about corporate restructuring, 43.1% of companies expressed a need for further restructuring, while 31.4% said that further restructuring efforts would be difficult (due to the limited scope for further restructuring). 18.7% answered that they saw no need to carry out restructuring in the first place.