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Banking & Finance

Japan's banks shed more than 3,600 workers in record drop

Digitization and reduced hiring result in sharpest decrease since fiscal 2005

More than 70% of Japan's 81 banks lowered staff numbers in fiscal 2018.

TOKYO -- Japanese banks reduced their collective payroll by 3,629 employees in fiscal 2018, researchers have found, with digitization of paperwork and a slowdown in hiring driving the steepest drop in available data.

The total head count came down to 223,778 at the end of March, with declines hitting more than 70% of 81 banks across the country, including major nationwide lenders and regional ones large and small, according to Tokyo Shoko Research. It was the sharpest decline notched in records dating back to fiscal 2005.

A major factor in the past year's drop was lenders' efforts to cut down on hiring recent graduates. Banks have been working to boost productivity by digitizing tasks like tabulating deposit and transfer forms. Overall employment at Japanese banks began to drop in fiscal 2017 after generally climbing since it crossed the 200,000-person threshold in March 2008.

Sumitomo Mitsui Banking Corp. notched the sharpest drop in absolute terms with 710 people, followed by peer MUFG Bank with 577 and Mizuho Bank with 310.

The steepest decline relative to overall workforce took place at Saga Kyoei Bank, whose ranks shrank 11% on the year to 289 people at the end of March. The bank, based in Kyoto's neighboring Saga Prefecture, brought just one new person aboard in fiscal 2018 as it worked to cut down on labor. It has shrunk its payroll by nearly 30% in the past three years through a mix of branch closures, restructuring and slowed hiring.

In second place was Gifu Prefecture's Juroku Bank, which shed 9% of its staff to reach a total of 2,480 people. Coming third was Fukuoka Prefecture's Chikuho Bank with an 8% decline to 548 employees.

Some lenders, meanwhile, are working to improve staff retention. The average yearly pay across the banks rose 0.2% in fiscal 2018 to 6.1 million yen ($57,430), the first increase in three years. A number of banks took such steps as raising starting pay or expanding various child care-related benefits.

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