Large companies announce workforce reduction plans

Japanese electric companies have recently announced their personnel restructuring plans in rapid succession, drawing widespread public interest.

One company has become the focus of particular attention: Matsushita Electric Industrial, a company that championed Japan's lifelong employment system ever since it was founded by Konosuke Matsushita, announced its first-ever personnel downsizing plan on July 31. The announcement sent shock waves throughout Japan since it was a major turnaround for Matsushita, a company that represented the so-called Japanese corporate management style that had propelled Japan on its path to a dramatic postwar recovery.

In the case of NEC, immediately after the labor union decided to discontinue, as of August 2001, collecting reserve funds to prepare for future strikes, the company unveiled a plan to eliminate 3,000 to 4,000 workers in the semiconductor and electronic parts departments.

Competition is intensifying in the slumping IT-related industry. The two companies' drastic workforce reduction plans show that they were forced to make harsher projections for the future.