The number of bankruptcies in Japanese companies has exceeded 10,000 for two consecutive years.

Reference News Network, January 15 report. According to the "Nikkei Business Publications," on January 14, the number of bankrupt companies across Japan exceeded 10,000 for the second consecutive year in 2025. With the intensifying labor shortage, more and more small and medium-sized enterprises are being overwhelmed by the pressure of rising wages. To retain employees amid inflation, companies have been continuously improving employee benefits.

The Tokyo Shoko Research Company released data on the 13th showing that the number of bankrupt companies (with liabilities of at least 10 million yen) increased by 3% year-on-year in 2025, reaching 10,300, setting a new high in 12 years.

Among these, cases of bankruptcy caused by labor shortages have drawn particular attention. In 2025, this number reached 397, an increase of 40% compared to the previous year, which is also the highest value since the start of this survey in 2013. Additionally, the number of companies going bankrupt due to "employee turnover" rose by 50%, reaching 110, also setting a new historical high.

Shohei Sakata, head of the Information Department at Tokyo Shoko Research, analyzed: "In recent years, some companies have overpaid to retain employees, leading to 'salary increase fatigue.'" Sakata believes that deteriorating cash flow may lead to further increases in the number of bankrupt companies in 2026.

The number of bankrupt companies in the service sector, where labor costs account for a higher proportion, increased by 4% to 3,478. Among them, the number of bankrupt companies in the catering industry increased by 1% to 1,002, breaking through the 1,000 mark for the first time. The number of bankrupt companies in the beauty industry also increased by 5%, reaching a historical high of 120. Many operators seem to have been forced to give up their businesses under the dual impact of rising raw material costs and employee attrition. (Translated by Liu Lin)

Original article: toutiao.com/article/7595502950982697510/

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