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Economy

Japan Inc. cuts job offers to college grads for 1st time in 9 years

Tenders drop below April hiring totals amid IT and financial disruptions

Japanese university students traditionally find career-type jobs before graduating, but next year's graduates are already dealing with an evaporating jobs pool. (Photo by Tsuyoshi Tamehiro)

TOKYO -- Job offers from large companies to university students have fallen below actual hiring numbers from spring for the first time in nine years as the low interest rate environment, information technology disruptions and other economic challenges squeeze corporate Japan.

According to a survey Nikkei compiled on Tuesday, 0.5% fewer graduates and undergraduates at Japanese universities had accepted job offers by the beginning of October than the actual number of new hires in April.

It is the first fall since 2010, when Japan was reeling from the global financial crisis, for offers to fall below spring hiring totals.

In Japan, university seniors traditionally accept jobs that they take up the following April.

According to the survey, banks and securities companies are being especially tight with job offers.

Nikkei asked 1,035 major companies how many students had accepted offers by Oct. 1; 924 companies responded. The tally shows 118,837 students had accepted job offers by that date.

Banks reduced the number of job offers by 11.1%, and securities companies by 26.4%, compared to April hires. The financial industry is struggling through many challenges -- a prolonged low interest rate environment as well as nonfinancial companies and fintech startups entering their domain. As a result, they are introducing automation and cutting back on hiring.

MUFG Bank reduced the number of job offers by 44.7% from its April hires, to 530 for the 2020 hiring season. Mizuho Financial Group trimmed its offers by 21.4%, to 550.

Nomura Securities had offered 333 jobs by October, down 44.7% from its April hiring totals. Daiwa Securities Group reduced its offers by 29.4% compared to its April hires, to 480. Both companies are affected by falling investment trust sales.

In nonfinancial industries, the total number of job offers increased 1.1%. However, the figure decreased in 10 of the manufacturing industry's 19 segments.

Auto and auto parts makers offered 5.5% fewer jobs than actual hires they made in April. Offers from machinery companies fell 3.9% from the newcomers they accepted in April.

In the 2018 survey, only five manufacturing segments showed declines.

Offers from electrical appliance makers also suffered, with job tenders falling 1.3% below spring hiring totals. Nidec offered 249 jobs, 38.8% fewer than its actual hires of six months ago. A representative of the precision motor maker blamed "an increased uncertainty in the global economy affected by factors such as the U.S.-China trade friction."

Job offers from "other retail businesses" increased 7.2% from spring hiring figures. The sector includes drugstore operators, many of which are on a new store opening binge.

In the communications industry, where companies are increasing capital spending ahead of the rollout of 5G service, offers show a 9.4% improvement over actual April hires.

Prescription drugstore operator Ain Holdings had 900 offers accepted, up 120% from April arrivals, while online retailer Rakuten had 700 offers taken, up 70%, from the number of its new spring employees.

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