Japanese take a hint: you've been laid off

Hideki Murai says he has no time to be bitter, then laughs. "Maybe later," he adds. A young manager at a pharmaceutical firm, he learned just after Christmas he was being demoted.

Managers said Mr. Murai's performance was top-notch, but the firm was downsizing. Murai says they want him to quit and will pressure him until he does.

After years of recession, firms here are cutting jobs. But Japan's corporate culture is as singular in decline as it was in boom times: Few companies are issuing pink slips.

Instead, firms are using attrition, freezing new hires, and introducing what one firm calls "Life Vision System" - voluntary retirement. But many businessmen tell of pressure and humiliation as companies, unwilling to risk public ire with outright dismissals, push them to leave.

"Japanese companies bully their employees when they want them to go," says Yoshio Morizono, vice manager of Tokyo Manager's Union, a support group for white-collar workers. "And with the recession, they push their employees much harder these days."

Analysts welcome the layoffs, which mean Japan is finally restructuring. But in a country where corporate loyalty can come before family, risutora, as restructuring is known here, hurts.

Job-search centers and mental health clinics are jammed; suicides are at a record high. Disillusioned corporate warriors are unlikely to be as loyal to Japan Inc. in the future.

"I've heard that in America, when a company needs to fire you, they just tell you," says Murai at home, his tie still tightly knotted hours after work. "I wish it were like that here. It would leave you some dignity."

The taboo of a clear-cut job dismissal is still strong. It began after World War II, when years of high growth allowed companies to make the unwritten promise of a lifetime job. The practice became part of the social, economic, and corporate culture.

The 1990s recession has made the jobs-for-life system economically infeasible, but its values still shape society. For a company looking to shed workers, unions are weak and lawsuits are rare. The real problem would be disrupting corporate and cultural harmony by firing people.

So it rarely happens, even this spring when Hitachi jettisoned 6,500 positions, trading firm Marubeni trimmed 900, and Mitsubishi Electric cut 14,500 jobs.

But, the number of people who left their jobs involuntarily in April exceeded the number who quit, for the first time since 1987. Today Japan's unemployment is at a record 4.8 percent.

Most companies offer lucrative retirement packages to encourage voluntary retirement. The most able employees often leave, sure they'll find another job. But many aren't so confident. A May survey found 80 percent of men in their 40s and 50s are worried about job security.

"Job-hopping isn't a positive thing here," explains Mr. Morizono. "Usually it means you're moving down the ranks. We tell people to hang on to their jobs as best they can."

Morizono tells of businessmen called into meetings where five or six colleagues encourage them to leave the company. Yet companies contacted for this article all deny using pressure. "No way," says a Hitachi spokesman.

Murai asked to use a pseudonym for this article, and that his company not be named. But a call to its headquarters in the southwestern city of Osaka confirmed the company has started a voluntary retirement program.

Murai says it's hardly voluntary, and points to the firm's management guidelines. They outline five steps to get rid of an unwanted employee, starting with demotion, followed by a salary cut, then a transfer to another town, then a request that the employee quit, which frees the company from offering severance pay. The final step is a plea for the employee to retire, which requires the company to pay more benefits.

"If they want you to go, they'll never just ask you," he says, raising his voice over his young daughter's spirited singing. "Employees are supposed to understand and leave."

After his demotion, his salary was cut by about $20,000. It's a common strategy, says Yoshio Higuchi, an economics professor at Tokyo's Keio University. "If their salaries go down, employees know they aren't that necessary to their companies," he says. "It's a good way to promote voluntary retirement. The only thing [workers] can do is leave the company."

Murai stayed. Late in January, the personnel department sent him a letter saying there was no place for him in the company. The letter doesn't dismiss him, but reads, "you can stay home as of February 1. You will take all orders from the branch manager. If you want to come to, contact, or telephone the office, you must contact the branch manager for permission first."

Murai was told to return to work on April 1. "It's a nothing position," he says. "I've been given far less responsibility and people are very unfriendly." But work is preferable to the uncertainty of unemployment.

Some people don't think so. Mitsuo Yamaguchi was demoted twice at his Tokyo fashion company before he decided to quit. "I'm not stupid," he says. "I knew they wanted me to go, and I wasn't going to let them demote me again."

He spends mornings at a government job-search agency. With unemployment so high, these agencies are now known for "an hour's wait for a minute of help," as a recent newspaper editorial fumed.

Mr. Yamaguchi, dapper in a cashmere jacket, doesn't mind.

He shows up to qualify for unemployment benefits, but plans to start his own import business. "I've had it with working for someone else," he says.

Experts attribute record-high suicides in 1998 to the economy. Psychiatrist Masao Ikeda has seen a surge in business at his Tokyo clinic.

"It's all because of the economy," he says. "[My patients] have been company men all their lives and have no idea how to be anything else."

Says Hisashi Yamada, chief economist at The Japan Research Institute, an affiliate of Sumitomo Bank, "People have come to realize that restructuring can't be avoided. The key will be what kind of response the government comes up with. We need a more flexible system that absorbs part-timers and temporary staff."

The government is working on reform measures to cope with unemployment. Business groups, media, and unions have proposed tax reform to support new businesses; relaxing unemployment insurance standards; and pensions that can move from job to job.

It may not come soon enough for Murai. "I'm not looking for another job yet," he says. "But I'm feeling the pressure."

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