Editor’s note: This article was first published in September 2013. Shinzo Abe was prime minister then (he left office in 2020 and died in 2022), Sony’s headcount of more than 146,000 is a 2013 figure, and the debate on loosening Japan’s dismissal rules has moved on since.
Labour relations between companies and employees in Japan are a world apart from those in the West. In Japan, the norm is for someone to finish their studies, join a company and stay there until retirement. To make that work, the company trains the person properly to make the most of all their talents and develop them.
Japan’s working culture is no different from Japanese culture in general, where one’s word and honour come before even life itself. That’s why it’s unthinkable for a company facing financial difficulties to lay off staff en masse to return to profitability. It’s a social taboo. That doesn’t mean it’s illegal: dismissing an employee is perfectly legal, but it’s frowned upon, and as a rule companies don’t risk it because of the terrible image it would give them in the eyes of the Japanese public.
If a Japanese company did what happens every day in Europe and the United States (mass layoffs, collective redundancy procedures known in Spain as EREs…), it would probably be much cheaper for it to close its factories and shops in Japan, since consumers might shun it.
Right now, though, as the New York Times reports, this situation could change. The case of Sony has come to light: a company with more than 146,000 employees that is under pressure because it needs to cut part of its workforce in Japan but can’t ethically do so. Its answer has been the “boredom room”, which in Europe and the United States we would call mobbing.
Japanese companies have set up rooms where some employees are sent to read the newspaper, browse the internet or do whatever they like alongside other workers in the same situation, in the hope that they’ll get bored and ashamed and leave the company of their own accord.
The debate is open in Japan, where Prime Minister Shinzo Abe wants to change the country’s working mentality by easing the restrictions on companies so that layoffs can be carried out more quickly, with the aim of making Japanese companies more competitive abroad.
Some Japanese economists say that making the labour market more flexible could help companies struggling to streamline their workforces and compete better in the global economy. Fewer restrictions on layoffs could make it easier for Sony to exit loss-making traditional businesses and focus its resources on its most promising and innovative ones.
According to the New York Times, Sony has negotiated with some employees, offering severance of up to 54 months’ salary as well as attractive early-retirement terms, without managing to reach an agreement in the end. So, to avoid compulsory dismissals without slipping into mobbing, it has eventually turned those boredom rooms into preparation and training rooms that help employees move into another job.
There’s no doubt that labour practices in Japan contrast with those in Europe and the United States, where the first thing companies have done to restore profitability has been to lay people off en masse, right away. Western economists admit this is cruel for workers but argue it’s good for the global economy as a whole.
The most critical economists in Japan warn that such policies would only destroy Japan’s social fabric, creating mass unemployment to improve company accounts in the short term, without taking into account that in the long term unemployment itself would cause companies’ domestic sales to fall.
As the saying goes, some do too much and others too little.
Featured image: User:Kentin, CC BY-SA 3.0, via Wikimedia Commons.
