Major distribution company Seven & i Holdings Co. will cut a total of about 3,000 jobs by fiscal 2022 in the group's large-scale restructuring program, which the company announced Thursday.
According to the announcement, Seven & i Holdings will cut jobs at group affiliates Sogo & Seibu Co. and Ito-Yokado Co. In addition, five regional Sogo & Seibu stores will be shut down, while 33 Ito-Yokado stores will consider tie-ups with other companies or closures.
Seven & i Holdings' major restructuring follows years of tough business conditions, such as from declining populations in regional cities and the spread of online shopping.
Out of its 15 Sogo & Seibu department stores, Seven & i Holdings will shut down four stores in August 2020 -- the Seibu Okazaki store in Okazaki, Aichi Prefecture, the Seibu Otsu store in Otsu, the Sogo Seishin store in Kobe, and the Sogo Tokushima store in Tokushima -- and the Sogo Kawaguchi store in Kawaguchi, Saitama Prefecture, in February 2021.
The company will also reduce sales floor space at the Seibu Akita store in Akita and the Seibu Fukui store in Fukui in February 2021. Through these measures, Seven & i Holdings will cut about 1,300 jobs by the end of fiscal 2022, compared with its workforce at the end of fiscal 2018.
Supermarket chain Ito-Yokado will consider tie-ups with other companies including Seven & i Group companies or closure at 33 unprofitable stores out of all 158 stores across Japan. It will cut its workforce by about 1,700 by the end of fiscal 2022.
Seven & i Holdings President Ryuichi Isaka said at a press conference held in Tokyo: "We are facing a harsh business environment. In order to achieve stable profitability, we need to embark on further structural reforms."
Convenience store chain Seven-Eleven Japan Co. will shut down or relocate about 1,000 unprofitable stores across the country to improve profitability. On the other hand, the company will support its franchise stores by reducing its royalty rate, which is a brand-usage fee paid to the convenience store chain headquarters, by a maximum of 200,000 yen a month.
Franchise convenience stores are seeing a decline in profits due to rising labor costs associated with the labor shortage and other reasons. By lowering the royalty rate, the company expects an annual profit increase of about 500,000 yen per store on average.
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