Photo/Illutration An employment bureau in Tokyo’s Shibuya Ward in April (Asahi Shimbun file photo)

Reflecting bleak business prospects and worries over the pandemic, many companies are accelerating corporate downsizing by asking employees to take voluntary severance as part of their restructuring plans.

In the first half of 2020, 41 listed companies solicited some of their employees to take buyout offers, according to credit reporting company Tokyo Shoko Research. That exceeded the number for all of 2019.

The last time such a large number of companies offered voluntary severance over a comparable period was the first half of 2010, when the aftershock of the 2008 collapse of U.S. investment bank Lehman Brothers was still very much being felt in Japan.

In July, at least four companies publicly encouraged their employees to consider taking buyouts. 

The trend is expected to continue.

Since 2019, some companies have been convincing employees in older age groups, who earn comparatively higher salaries than other employees, into early retirement to decrease operating costs.

Voluntary severance packages have not just been offered to temporary workers but to full-time workers as well.

The number of companies soliciting voluntary severances in 2019 was 35, almost triple the previous year, according to Tokyo Shoko Research.

These companies sought to shed more than 10,000 people in total.

The pandemic this year is prompting more companies to offer employee buyouts.

In the first half of 2020, companies sought to cut more than 7,000 workers of 41 firms--the largest number since the first half of 2010, when 66 companies solicited voluntary severance.

The credit reporting company collected the data from about 4,000 listed companies, excluding those that did not disclose such figures and unlisted midsize and small companies.

Researchers believe the actual number is much higher.

Many companies have languished during the pandemic and it appears that the damage will not be contained anytime soon.

Researchers expect that more companies will join the list and look to downsize, after releasing their mid-term financial earnings reports for the first six months ending in September.

Many of the companies offering buyouts are in the restaurant, retail, apparel-related and manufacturing sectors--all of which have been squeezed by the pandemic.

The pace and the amount of downsizing across these industries will pick up in the second half of the year, a researcher from Tokyo Shoko Research said.

According to the labor ministry, 36,750 people lost or were expected to lose their jobs because of the pandemic, as of July 17.

More than half were temporary workers who were not offered extensions by their employers.

The ministry’s data is made up of information collected by local labor offices and may not reflect the number of people who accepted voluntary severance.

The ministry has urged companies to protect their employees and maintain employment levels by offering subsidies to those that closed their businesses due to the pandemic.

In May, 4.23 million people took a temporary leave from work.

The researchers raised concerns that, as the pandemic continues, many companies are expected to reach the limit for allowing workers to take a temporary absence and move to ask them to accept buyouts.

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