Some Japan firms rethink traditional office as pandemic boosts working from home: Reuters poll

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(C) Reuters. FILE PHOTO :A security guard walks past in front of the Bank of Japan headquarters in Tokyo

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By Tetsushi Kajimoto

TOKYO (Reuters) – A third of Japanese firms are reassessing using offices after a sharp drop in their utilisation in August from a year ago, as 65% of firms allowed or encouraged employees to work from home due to the coronavirus pandemic, a monthly Reuters poll showed.

Many workers in Japan, and elsewhere in the world, began telecommuting as the coronavirus spread and governments imposed restrictions on businesses and movements to contain it.

Some 62% of firms in the Reuters Corporate Survey said office utilisation fell 10-20% in early August from a year ago, while 25% said it had decreased 30-50% and 9% said it had more than halved over that period.

The survey showed firms were giving workers more flexibility during the pandemic and were starting to rethink the traditional office in a possible departure from the long hours and packed commutes that have come to symbolise Japan’s strong work ethic.

“Reviewing office workspace would boost social benefits as a whole as it helps ease the commuters’ ordeal and resolve office shortage,” a manager of a paper and pulp maker wrote in the survey on condition of anonymity.

Until the start of 2020, there was growing demand for office space in Tokyo from firms seeking to expand or upgrade, but the vacancy rate has worsened for a fifth month running in July.

The survey showed 33% of Japanese firms were reviewing or considering re-examining office utilisation.

Out of those, 48% were considering establishing satellite offices – the most popular choice – while 33% were thinking about downsizing by cancelling leasing contracts and 10% were eyeing shared workspaces.

In July, IT solutions company Fujitsu Ltd unveiled a plan to halve its office space in three years, allowing flexible hours for roughly 80,000 workers – many of whom would work from home – under a “new normal”.

The corporate survey, conducted for Reuters by Nikkei Research between Aug. 3-13, polled 495 big and midsize non-financial firms, with some 220 answering the questions.

The survey also showed firms resisted the concept of “workation” or telecommuting from resorts and rural areas, with nearly two-thirds of firms saying they were not considering it.

U.S.-CHINA TENSIONS

Asked about the souring relations between the United States and China, 46% of Japanese firms said U.S. sanctions against China would hit their profits.

Relations between the world’s two largest economies have deteriorated sharply in recent months as they engage in a tit-for-tat round of sanctions over trade, Hong Kong and China’s handling of the coronavirus.

One-fifth of Japanese firms said they were moving or considering shifting their businesses, operational bases and supply chains out of China, Japan’s largest trading partner.

A vast majority of those considering it would move operations to other parts of Asia, the survey showed.

Asked whether Japanese firms had been pressed to choose between U.S. and Chinese markets in the current context, an overwhelming majority of Japanese firms answered no.

If they were forced to choose, 62% said they would favour the U.S. market over China’s.

“When considering profits solely, China is attractive. But there are many sources of concern such as information control,” a ceramics maker manager wrote in the survey.