Shusaku Tani is employed at the Sony plant, but he does not really work.
For more than two years, he has come to a small room, taken a seat and then passed the time reading newspapers, browsing the Web and poring over engineering textbooks he dug up from his college days. He files a report on his activities at the end of each day.
Sony Corp, Tani’s employer of 32 years, consigned him to this room because they cannot get rid of him. Sony had eliminated his position at the Sony Sendai Technology Center, which in better times produced magnetic tapes for videos and cassettes. However, Tani, 51, refused to take an early retirement offer from Sony in late 2010 — his prerogative under Japanese labor law.
So there he sits in what is called the “chasing-out room.” He spends his days there, with about 40 other holdouts.
“I won’t leave,” Tani said. “Companies aren’t supposed to act this way. It’s inhumane.”
The standoff between workers and management at the Sendai factory underscores an intensifying battle over hiring and firing practices in Japan, where lifetime employment has long been the norm and where large-scale layoffs remain a social taboo, at least at Japan’s largest corporations.
Sony wants to change that, and so does Japanese Prime Minister Shinzo Abe. As Japan’s economic recovery sputters, reducing the restraints on companies has become even more important to Abe’s economic plans. He wants to loosen rigid rules on job terminations for full-time staff.
Economists say bringing flexibility to the labor market in Japan would help struggling companies streamline bloated workforces to better compete in the global economy. Fewer restrictions on layoffs could make it easier for Sony to leave loss-ridden traditional businesses and concentrate resources on more innovative, promising ones.
“I have a single wish for Japan’s electronics sector, and that’s labor reform,” Jefferies & Co technology analyst Atul Goyal said.
Sony said it was not doing anything wrong in placing employees in what it calls Career Design Rooms. Employees are given counseling to find new jobs in the Sony group, or at another company, it said. Sony also said that it offered workers early retirement packages that are generous by US standards: In 2010, it promised severance payments equivalent to as much as 54 months of pay. However, the real point of the rooms is to make employees feel forgotten and worthless — and eventually so bored and shamed that they just quit.
Sony, a sprawling company with more than 146,000 employees, is under pressure. It has been outmaneuvered by more nimble competitors and its executives are trying to remake the company. Fixing Sony is especially critical after it snubbed the US activist investor Daniel Loeb’s push to spin off part of Sony’s entertainment business. Its shares have fallen almost 10 percent since Sony rejected his proposal last week.
Critics of labor changes say something more important is at stake. They warn that making it easier to cut jobs would destroy Japan’s social fabric for the sake of corporate profits, causing mass unemployment and worsening income disparities. For a country that has long prided itself on stability and relatively equitable incomes, such a change would be unacceptable.
“That’s not the kind of country Japan should aim to be,” said Takaaki Matsuda, who leads the Sendai chapter of Sony’s labor union.