East Japan Railway Co. (JR East) will furlough some 1,800 employees, mainly at its headquarters, by putting 200 on temporary leave per day on a rotating basis between July 1 and Sept. 30.
The furlough, the first of its kind by JR East, reflects a drop in passenger demand amid the coronavirus crisis, the company said Wednesday.
The program will not cover train drivers or other crew members. JR East will avoid reducing pay for those to be put on temporary leave by using the government's employment adjustment subsidy program.
JR East decided to furlough employees following an improvement in operational efficiency brought about by a review of its businesses and changes in the circumstances surrounding this summer's Tokyo Olympics and Paralympics, such as the organizers' decision not to accept spectators from abroad.
In fiscal 2020, which ended in March, JR East posted a consolidated net loss of ¥577.9 billion, its first red ink since it was established with other Japan Railways Group firms through the April 1987 breakup and privatization of the Japanese National Railways.
In fiscal 2019, JR East logged a net profit of ¥198.4 billion.
Due to the dismal fiscal 2020 result, the company aims to drastically cut personnel and other expenses.
Among other JR Group companies, West Japan Railway Co. (JR West) and Central Japan Railway Co. (JR Tokai) have already furloughed employees amid the pandemic.
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