In anticipation of lower sales over the next few months, Toyota has reduced its Japanese factory workforce by 600 employees. Toyota expects its Japanese sales to decline as government incentives for green cars expire next month.
Toyota said all 600 employees were contract workers. Per Toyota’s rules, it can hire temporary contract workers for up to 2 years and 11 months. At the end of that temporary period, contract workers can either be hired on as full-time employees – earning rights for better pay, promotion consideration and lifetime employment – or be let go.
At the end of Toyota’s 2010 fiscal year – which concluded in March – the Japanese automaker employed 2,400 contract workers. During Toyota’s last financial year, 160 contract workers made the transition to full-time employees.
Green car incentives dry up
For the past several months, the Japanese government has been supporting fuel-efficient car sales with buying incentives. However, those incentives are slated to expire next month, which could put the Japanese market in a bit of a tail spin. The Toyota Prius has been the number one selling vehicle in Japan for the past 15 months, with the end of incentives likely to threaten that streak.
