Don’t Allow Japan’s Major Corporations to Disguise ‘Profitable Restructuring’ as Convenient Layoffs
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Introduction: Numbers Alone Cannot Explain Japan’s Economy
GDP rankings and global competitiveness tables are attention-grabbing, but to judge the state of Japan’s economy by these numbers alone is simplistic. The real question is not what rank we hold, but why we are slipping and where our structural weaknesses lie.
According to the IMD World Competitiveness Yearbook, Japan now ranks 51st in business efficiency and 58th in productivity—alarmingly low among advanced economies. These figures are not abstract statistics; they mirror the lived reality of Japanese workplaces: endless meetings, delays awaiting approvals, and a culture that mistakes long hours for diligence. Such inefficiencies form the core of Japan’s management illness.
Chapter 1: The Contradiction of “Profitable Restructuring”
Nothing illustrates this problem more clearly than “profitable restructuring.” Restructuring should mean rebuilding—redeploying talent and preparing an organization for the future. Yet in Japan, major corporations conduct early retirement programs during profitable periods, cutting employees not to reform, but to use them as a “profit adjustment valve.”
This is not restructuring but short-term balancing of the books. It sacrifices long-term competitiveness for the sake of near-term numbers.
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Losing future talent when resources should instead be used to invest in them.
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Avoiding the harder task of creating value and pricing properly.
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Trading knowledge and morale for momentary gains.
Profitable restructuring is evidence that Japanese managers view people not as assets but as costs.
Chapter 2: Management That Cannot Imagine the Future
The deeper issue is that many executives genuinely believe these layoffs are a “correct strategy,” and they proclaim it publicly. This reveals the bankruptcy of managerial thinking.
A leader’s role is to sketch a vision of the next decade and align talent toward it. Instead, Japanese executives emphasize only protecting present profits. The unspoken message to employees is: “Do not challenge—just preserve the status quo.”
By contrast, U.S. and Chinese companies raise their market valuations by offering investors a compelling “story of the future.” Japan’s corporations, which speak only of cutting people, have seen their market capitalization lag ever further behind.
Mistaking efficiency for downsizing—and convincing themselves that this is sound management—has become the mindset accelerating Japan’s decline.
Chapter 3: Low Productivity—The True Illness of Japanese Management
The IMD’s ranking of 58th in productivity is a warning siren.
At the ground level, the causes are obvious:
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Routine meetings with no clear purpose.
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Endless “let’s take it back” culture that postpones decisions.
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Processes stalled waiting for approvals.
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Bloated teams with diluted responsibility.
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A belief that “working late = working hard.”
The problem is not the quality of the people but the inefficiency of the system itself. No matter how hard employees work, a poorly designed workflow will never produce high results. This is the true illness of Japanese management.
Chapter 4: Large Corporations and SMEs—Roles That Must Be Complementary
It is wrong to discuss large corporations and small-to-midsize enterprises (SMEs) by the same standards. Their roles differ fundamentally.
The role of large corporations
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Use their abundant capital to invest in people, reskilling, and R&D.
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Ensure employment stability and provide society with reassurance.
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Pay fair prices to subcontractors, sustaining the industrial base.
The role of SMEs
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Leverage their small scale for agility in new markets.
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Pursue new businesses and niche markets with flexibility.
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Provide regional employment and pass down technologies.
In essence, large corporations should serve as the stable foundation, while SMEs act as the challengers on the frontier. Only when both fulfill these complementary roles can Japan’s economy circulate and renew itself.
Chapter 5: Designing Roles Through Policy
Roles must be embedded in systems, not left as ideals. Policy must therefore differentiate between large firms and SMEs.
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Enclose large corporations
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Mandate investment in human capital and fair subcontracting.
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Impose taxation if these responsibilities are neglected.
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Liberate SMEs
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Relax dismissal regulations in times of crisis.
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Strengthen re-employment and training support to enable risk-taking.
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This two-pronged approach—enclosing large firms and liberating small ones—is the only way to revive Japan’s economic metabolism.
Conclusion: Without a Future Vision, There Is No Revival
Japan’s management illness is not simply about GDP rankings; it is about chronically low productivity, rooted in a short-termist mindset that cannot imagine the future.
By treating profitable restructuring as a legitimate strategy, managers frame people as costs rather than as resources, discarding tomorrow for today’s numbers. The widening gap with the U.S. and China in market capitalization is the inevitable result.
The first step is simple yet radical: cut waste in management before cutting people. Then, clarify the roles of large firms and SMEs, ensuring that each fulfills its duty.
The future exists only if we dare to imagine it. Without investment in people and belief in the future, Japan cannot recover its lost vitality.
Read in Japanese↓
大企業の「黒字リストラ＝都合の良い人員削減」を許すな（2025.9.22）
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