On February 10, Sumitomo Heavy Industries declared that it will be reducing its workforce by approximately 500 employees across its domestic group companies. The company has begun soliciting voluntary retirements and will cease renewing re-employment contracts with employees aged 65 and older. The voluntary retirement offer targets those aged between 55 and 64 with at least three years of service, with the retirement period commencing from the beginning of April until the end of May.

In terms of financial implications, the company anticipates incurring additional costs of 2.5 to 3 billion yen for the fiscal period ending December 2026 due to retirement bonuses. However, this workforce reduction is projected to generate annual savings of around 5 billion yen as part of the company's broader cost-cutting initiatives. Sumitomo Heavy Industries has underscored the urgency of these measures in light of ongoing economic pressures in its sectors, including construction machinery, cranes, and reduction gears.

The reported move comes amid a broader trend of workforce restructuring in Japan, where numerous companies are streamlining operations despite being profitable. Other notable corporations like Shiseido and Panasonic have also undertaken significant layoffs recently, indicating a shift towards operational efficiency. This surge in restructuring reflects both domestic labor market challenges and the need for companies to adapt to a rapidly changing economic landscape.