Japan Tobacco to cut 1,600 jobs
- Published: 30 Oct 2013 at 17.54
- Online news:
Japan Tobacco Co said Wednesday it will close four of its nine cigarette manufacturing-related factories in Japan and a vending machine production base, most of them in March 2015, and cut 1,600 jobs, or about 20% of employees in its tobacco business, due to falling sales.
Vice President Akira Saeki told a news conference the business environment surrounding JT "is very harsh against the backdrop of higher consumer health consciousness and greater restrictions on smoking."
Also, the increase next April of the consumption tax from 5% to 8% "will eat into consumption," he said as a reason for the drastic restructuring.
Japan Tobacco, whose workforce stood at 8,925 as of March, aims to make up for falling domestic cigarette sales by increasing cigarette sales overseas and expanding its domestic non-cigarette businesses, which include pharmaceuticals and food, JT officials said.
With the planned cost-cutting measures, JT "would like to enhance the competitive edge (of its tobacco operations) as the core of the foundations to generate revenues and profits," Saeki said.
JT said it will close three of the four factories -- those in Koriyama, Fukushima Prefecture; Hamamatsu, Shizuoka Prefecture; and Okayama, Okayama Prefecture -- and the vending machine plant in Akashi, Hyogo Prefecture, on March 31, 2015. A year later, it will close the JT plant in Hiratsuka, Kanagawa Prefecture.
The Okayama plant has been printing cigarette pack labels, while the Akashi plant has been developing and manufacturing cigarette pack vending machines. The Akashi's closure means JT will pull out of vending machine manufacturing.
The personnel cut will be implemented by soliciting applications to resign voluntarily on March 31, 2015, in principle, it said.
JT will also scrap in March 2015 some functions at a factory in Sukagawa, Fukushima Prefecture, which has taken charge of processing raw leaf tobacco for cigarettes, JT said. Fukushima has been a major leaf tobacco-producing district.
The five factories to be retained are in Kyoto; Utsunomiya, Tochigi Prefecture; Iwata, Shizuoka Prefecture; Chikushino, Fukuoka Prefecture; and Kasama, Ibaraki Prefecture.
JT also intends to consolidate into 15 its 25 branches in Japan, which have been overseeing marketing activities in local areas, it said.