As many as 27,000 Daiei Inc. workers could face the ax if the struggling retail giant specializes in food supermarkets under its rehabilitation drive, according to informed sources.
Daiei’s three main creditor banks — UFJ Bank, Sumitomo Mitsui Banking Corp. and Mizuho Corporate Bank — have compiled a provisional estimate on personnel who would become idle in the course of rehabilitation procedures led by the Industrial Revitalization Corp. of Japan, the sources said.
The figure is about half of the 58,000 full-time and part-time workers employed by Daiei as of the end of February. The government has requested that Daiei take into consideration the possible impact on the national employment situation and regional economies in compiling its rehabilitation plan.
According to the banks’ estimate, about 31,000 of the 58,000 workers would engage in the food supermarket business, leaving the remaining 27,000, including 7,200 full-time workers, idle.
The banks concluded that these workers could be employed by rival retailers and new tenants who will enter buildings now housing Daiei outlets. But it remains unclear whether their re-employment is ensured.
Last week, Daiei decided to seek help from the IRCJ for its rehabilitation, caving in to pressure from the three creditor banks.
Daiei President Kunio Takagi said he will step down Friday to take responsibility for the retailer’s decision to seek IRCJ help.
It is believed the IRCJ will accelerate the closure of loss-making outlets for the retailer’s rehabilitation, which could further increase the number of excess workers.
For the six months ending Aug. 31, Daiei’s net profit plunged 49 percent to 1.18 billion yen.
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