TOKYO -- Staffing company Recruit Holdings is seeking credit lines worth a total of 450 billion yen ($4.15 billion) from Japan's three largest banking groups as the company's finances are hit by higher compensation payments to contract employees let go as a result of the novel coronavirus outbreak, Nikkei learned Friday.
Recruit has asked Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group to set up credit lines of 150 billion yen apiece, to create a pool of cash to compensate contract workers laid off by clients hit by the coronavirus.
Recruit's seeking credit highlights how the pandemic is starting to bite the corporate world more generally, having first ravaged consumer-facing companies.
Recruit provides a wide range of industries with staff. Its human resources business accounted for about half its revenue of 1.8 trillion yen in the April to December period of 2019.
Recruit had about 400 billion yen in cash deposits as of December last year. It is trying to amass additional funds in case the virus continues to sap its revenue.
Recruit hires job-seekers and dispatches them to client companies. When clients terminate a contract with a worker, Recruit must pay compensation if the worker cannot find another job.
Recruit's advertising revenues from its travel and restaurant websites have also fallen sharply in the wake of the outbreak.