Posted on: Wednesday, August 29, 2001

Japan students face dim job prospects

Bloomberg News Service

TOKYO — Masaya Omata figured finding a job at a big-name company would be easy after getting into Tokyo's Keio University. With Japan's recruiting season winding down for students like him who will graduate next March, he now only hopes he won't have to flip burgers or sell shoes.

"It's really distressing," said Omata, a 23-year-old business major. "Before, getting a diploma from Keio was like a free pass to any job, but your school name means nothing with the economy in such bad shape."

Such companies as Toshiba Corp. and Fujitsu Ltd. are cutting thousands of jobs, meaning students can't count on a system that virtually guaranteed lifetime employment for those who scored well enough on entrance exams to get into a top school. Japan's jobless rate rose to a record 5 percent in July, and the ratio of jobs to applicants fell to 0.6, the government said yesterday.

"Students will probably be on a rough road, as we'll see those companies limit hiring for new graduates, starting in the next fiscal year," said Kazuhiko Ogata, a senior economist at HSBC Securities Japan Ltd. Given their hesitance to fire people, Japanese companies will have to limit new hires, cutting payroll through attrition, he said.

Toshiba, which said Monday that it will cut 18,800 jobs, including 17,000 in Japan, will lower its recruiting target next year by 19 percent, to 600 new graduates, company spokesman Midori Suzuki said. Fujitsu, which last week said it will eliminate 16,400 jobs, plans to keep its hiring target at 700 new graduates next year, said company spokeswoman Mayumi Ueno.

Japan's weakening job market and worries about job security at large corporations are prompting more students to seek work at small companies or go to graduate school, said Nobuo Nagami, a job-placement official at Keio. Only 59 percent of Keio graduates last March obtained full-time jobs, down from 82 percent a decade earlier, he said.

A record-low 56 percent of students obtaining undergraduate degrees in March 2000 found full-time jobs, the third straight year of decline, according to government figures. That compares with a rate that ranged between 60 percent and 87 percent from 1950 to 1999. According to preliminary figures, 57 percent of graduates in March 2001 found full-time jobs.

Those who do get jobs are no longer assured of keeping them. As Toshiba and Fujitsu showed by announcing plans to eliminate 10 percent of their work forces, Japan's job-for-life tradition is waning in an economy that has sputtered through a decade of stop-start growth. Job losses may accelerate, too, as Prime Minister Junichiro Koizumi pledges to force lenders to cut off borrowers who don't keep payments current.

Public-sector hiring also may decline. Koizumi plans to cut government spending to help cap new bond sales at 30 trillion yen ($249.6 billion) a year. Even the nation's central bank is in the process of eliminating 500 jobs, or 9 percent of its work force, by March 2004.