Tokyo: Global investment banks will eliminate more jobs in Japan as they question growth prospects in the world's second-biggest economy and deploy staff to expanding Asian markets including China, Tokyo-based Executive Search Partners said.
"Foreign banks will freeze their hiring and launch another round of restructuring in Japan," Katsunobu Komizo, the chief executive officer of Executive Search, said in an interview yesterday, without naming companies.
"My worry and warning is that they regard Japan as a country where it's not worth taking risks; that they will pass on this country and invest in Hong Kong, Singapore and Shanghai."
Foreign financial firms have cut about 5,000 jobs in Japan over the past two years and the trend is likely to continue as initial share sales and takeovers in Japan lag behind the rest of Asia, Komizo said. The value of mergers and acquisitions in China and Hong Kong is double the amount recorded in Japan this year, according to Bloomberg data.
Additional job cuts in Japan would come even as the global financial industry bounces back from the credit crisis with a 7 per cent increase in fees to $37.1 billion (Dh136.2 billion) in the first half of this year, according to New York-based researcher Freeman & Co.
Komizo said Japan probably accounted for about 4 per cent of the total fees.
Acquisitions
China and Hong Kong have generated 2,043 merger and acquisition transactions worth approximately $135 billion this year, compared with 1,285 deals valued at $67.5 billion in Japan, according to Bloomberg data. Global investment banking fee income more than doubled in China and Hong Kong in the first half, compared with the year-ago period, according to Freeman.
"Foreign banks are boosting headcounts, especially in Hong Kong and Singapore," Yoshiki Kumazawa, a consultant at London- based Morgan McKinley, said in an interview. In Japan, the banks may hire more next year, though for junior positions, he added.
Tokyo-based executive search firm BizReach last month named Kumazawa the most valuable player in the banking industry, based on a survey of 500 human resource managers in Japan.
US rebuilding
In the US, firms are adding jobs for the first time in two years, rebuilding businesses cut during the financial crisis and offering guaranteed payouts to lure top bankers. In New York, 6,800 financial-industry positions were added from the end of February through May, the largest three-month increase since 2008, according to the New York State Department of Labour.
China this year may also be the world's biggest initial public offering market, as companies are likely to raise 500 billion yuan (Dh270.9 billion) in Shanghai and Shenzhen, PricewaterhouseCoopers said last month.
In Japan, foreign financial companies have eliminated 4,757 jobs since March 2008, bringing their total head count in the country to 23,724 through June, Executive Search said in a report e-mailed to Bloomberg News.
Bank of America's reduced staff in Japan by 16 per cent to 1,088 in March, from 1,300 employees in March 2008, according to the US company's statements. Over the same period, JPMorgan Chase cut employees to 873 employees from 1,083, and Morgan Stanley reduced staff in Japan by 24 per cent to 1,079 employees, according to company statements.
Morgan Stanley's Japan-ese unit posted a loss of 77 billion yen (Dh3.2 billion) for the financial year ended March 31, following a loss of 28.8 billion yen in the previous 12 months, as revenue from trading, fees and commissions declined.
Toyota lays off 600 workers at local units
Toyota has cut 600 workers at its Japanese factories, the company said yesterday, as it prepares for a drop in local sales when incentives for green cars run out next month.
Toyota Motor currently employs a total of 2,400 contract workers.
Contract workers are hired under different terms from other employees at Toyota, mainly to make it easier to increase or cut the numbers of workers in response to fluctuating demand for cars.
The contract workers are hired for up to two years and 11 months. When their term is up they are either laid off or get new contracts to become regular workers, who get better pay, promotion opportunities and lifetime employment.
Toyota's Japan sales have picked up lately because of government-backed incentives for fuel-efficient models like the Prius gasoline-electric hybrid, which has been the top-seller here for 15 months straight.
Automakers fear that sales will nosedive once the incentives run out.
