Daiei Inc. will cut the number of nonmanagerial employees by more than 1,000, or 10 percent of all employees, through a voluntary retirement program in November, sources said Wednesday.
The retailer, which has been rehabilitating itself under the Industrial Revitalization Corp. of Japan, informed its employees of the decision on Aug. 29, the sources said.
Daiei and its union have yet to agree on the number of retirees and retirement terms, but the company is considering offering additional payments worth six months of salary other than regular retirement allowances, the sources said.
The program, involving offering voluntary redundancy packages, is in line with a revival plan it drew up jointly with IRCJ in December in which Daiei set a goal of shutting down 53 unprofitable stores during the current fiscal year through next Feb. 28.
Daiei's workforce totaled around 9,600 as of the end of last February.
The company has suffered 17 straight months of year-on-year declines in sales through July.
Since May, it has been trying to turn around the surviving stores by focusing more on foods. It intended to absorb redundant staff at 100 supermarkets it planned to open.
But the company eventually decided to reduce the staff as it became uncertain whether it could open stores as planned because of intensifying competition, according to the sources.
Daiei already offered voluntary redundancy packages to 200 managerial employees in May, and 188 applied for the packages, the sources said.