AI Reshapes Hiring Landscape... One in Five Japanese Companies Considering Cuts to Hiring

21.9% of Companies Considering Hiring Cuts from 2029 Onward
Office Workers Face the Highest Risk of Replacement
Graduate Hiring in Japanese Manufacturing to Decline Next Year for the First Time in Six Years

Efficiency gains from the use of artificial intelligence (AI) are also affecting the hiring of new graduates at Japanese companies. More than one in five Japanese companies is considering reducing the number of university graduates it hires from 2029 onward.

Yonhap News Agency

According to the Nihon Keizai Shimbun (Nikkei) on October 24, a survey of major companies on their hiring plans and the potential for AI to replace work found that 3.2% planned to reduce new graduate hiring next year. The share rose to 10.4% among companies planning or considering cuts to hiring for fiscal 2028. For 2029 and beyond, 21.9% said they might reduce hiring or were considering doing so.

Office workers were most frequently cited as being at risk of replacement by AI, at 87.5%. Management positions, including corporate planning and general affairs, and technical positions, including information technology (IT) and engineering, followed at 25% each. As companies use AI to improve efficiency, they appear to be reassessing staffing needs and hiring plans for these roles.

Hiring at Japanese companies is already declining. Of the 42 industries surveyed, 23 reduced the number of university graduates they plan to hire next year. In manufacturing, hiring fell in 11 of 19 industries, turning negative for the first time in six years. The survey also found that non-manufacturing companies were reducing hiring in 12 of 23 industries.

However, hiring is expanding in fields where demand related to AI is growing. Kioxia, a long-term memory manufacturer, plans to increase the number of university graduates it hires next spring by 32.9% from the previous year. While AI is reducing staffing needs for some types of work, it is also intensifying competition for talent in related industries.

The Nikkei reported that Japanese companies' personnel strategies are shifting from simply securing a certain number of hires to selecting talent that can drive future growth.

Meanwhile, according to Japan's Ministry of Health, Labour and Welfare, 31.2% of people who found jobs after graduating from university in March 2023 left their jobs within three years, down 2.6 percentage points from the previous year. The three-year turnover rate has fallen for two consecutive years. Improved employment conditions at companies amid labor shortages are believed to have contributed to the decline.

This content was produced with the assistance of AI translation services.