Japan Post Group and its labour union will start talks on reviewing its workers and it may cut as many as 10,000 jobs, equal to 5% of its workforce, the Nikkei business daily reported.
The postal service unit garners a large part of its revenue through fees paid by the banking unit and another financial group company, Japan Post Insurance Co., via sales of their products through some 24,000 post offices nationwide.
The financial business has suffered from lack of investment opportunities amid the low interest-rate environment and a scandal involving inappropriate sales practice at Japan Post Insurance, an insurance subsidiary.
According to the latest earnings of Japan Post Holdings released last month, the banking and insurance units are forecast to post a drop of 23% and 13% in revenue for the fiscal year to March respectively.
The Financial Services Agency late last year ordered the two units to suspend new sales of insurance products. While the ban was lifted, they have continued self-imposed restrictions on new sales.
The Japan Postal Group Union and the company have agreed to negotiate changes in personnel allocation across various regions during the annual negotiations this spring. The workforce changes will be gradually made under the medium-term plans for 2021-2023.
The proposed 10,000 job cuts are planned to be done through controls on hiring and early retirement programs.
Japan Post Holdings' directors have been discussing the matter since last year, the report added.