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Finance

Japan Post plans to cut as many as 10,000 jobs

With financial business slumping, group prepares for talks with union

The group will propose that the 10,000 job cuts be done through controls on hiring and early retirement programs.   © Reuters

TOKYO -- Japan Post Group and its labor union will soon start talks on a reform plan for workers at post offices nationwide, including proposed job cuts totaling 10,000 positions, or 5% of the workforce.

Faced with falling profitability of its financial business, the Japanese postal service group has to slash labor costs. The financial business has suffered from lack of investment opportunities amid the low interest-rate environment and a scandal involving inappropriate sales practice at Japan Post Insurance, an insurance subsidiary.

The staff reduction comes amid Japan's falling population and digitization.

The group has agreed with the Japan Postal Group Union to negotiate changes in personnel allocation standards that specify the number of required workers for each region of operation in this spring's annual negotiations. The group aims to make the steps the pillar of rationalization measures to be incorporated into the next medium-term operational plans covering the period from 2021 to 2023.

Japan Post Holdings' board of directors in 2019 started behind-the-scenes discussions on cost-cutting measures for post offices.

The proposed 10,000 job cuts are planned to be done through controls on hiring and early retirement programs. The 5% cut over a short period will be a major step in downsizing for the group, whose total employees have decreased just 7% since the end of 2007.

The financial business has served as the main revenue source for Japan Post Group, but the scandal at the group insurance arm and falling profitability due to low interest rates mean its revenue fall will be inevitable.

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