A construction company that repeatedly carries out massive layoffs whenever its business performance slumps (from "The God of Construction")

The God of Construction

I had been working as a construction manager at an overseas construction site, and after completing my one-year assignment, I returned to Japan the other day. It’s only been about a month since I came back, but it already feels like something that happened a long time ago.

Strangely enough, my unpleasant memories don’t come back to me—most of what I recall are the fun times, the moments that moved me, and the things that impressed me—but I still vividly remember the “shocking announcement from the company” I received about a month before returning home.

Sudden Layoff Announcement

One day, with just one month left before I returned to Japan, I was summoned by the general manager from our parent company in Japan, who told me the following.

The message stated, “Due to poor business performance, we will be downsizing the company. First, we will solicit voluntary resignations, and then we will lay off employees.” (Since I am under contract with the Japanese parent company, I am not subject to layoffs.)

After meeting with the general manager, I spoke with various people on the ground and learned that it seems this company had actually done the same thing about 20 years ago. I was surprised to hear that at that time, they had slashed their workforce from about 124 employees to just 24 all at once!

When I asked if they had done anything new to make a fresh start after downsizing, they said they had simply waited until they could land new work, gradually rebounded, and eventually reached their current size.

If the company downsized because its performance had deteriorated, it needs to identify the causes of that decline and devise measures to improve the situation; otherwise, the same thing could happen again. I wanted to ask what steps the company had taken, but it seems they simply downsized to cut costs and just bided their time until the workload picked up again.

The company currently has about 130 employees. That’s roughly the same number as during the restructuring that took place exactly 20 years ago. It appears the plan this time is to start by cutting the workforce in half.

It seems a secret list has already been drawn up regarding who will stay and who will be let go, and I heard from the local director that they’ve already approached the people they want to keep. According to what I’ve heard, it appears that most of the executives will stay on, and only the younger employees will be let go. That’s only to be expected when you leave the selection process to people on the inside.

Is the company even seriously considering the reasons for its poor performance and ways to improve it? In my opinion, the reason for the decline in performance is likely that the quality of the buildings they construct is poor, which has led to a bad reputation spreading, making it difficult for them to secure new projects.

As a construction company, it’s obvious that if we don’t build a team dedicated to improving the quality of our work, we’ll end up as a company that goes nowhere. I believe that unless we stop clinging to old ways and take on new challenges, we won’t break through! However, the company lacks that determination, and it seems they intend to continue downsizing and simply endure the situation for the foreseeable future.

They're taking architecture lightly

Based on my experience actually working on the job, I feel that this company has two shortcomings.

First, although the parent company is based in Japan, it has absolutely no control over this subsidiary. To begin with, the parent company doesn’t undertake general contracting work in Japan. It’s a mystery why such a company would start general contracting work overseas.

Whether or not a company operates as a general contractor in Japan isn’t that important, but its experience and leadership as a general contractor are so lacking that it leaves all aspects of construction quality overseas entirely up to local contractors; as a result, the quality of the finished buildings is surprisingly low.

If we keep this up, it will be extremely difficult to compete with and continue to beat the other Japanese companies operating in this country. What’s more, our competitors are the major general contractors known as “Japanese Supercons.” Unless we put in the effort and come up with innovative solutions, we have virtually no chance of winning.

Another problem is that there is no one on-site who understands the capabilities of our competitors. While we fall short in every area—from proposal skills to overall capabilities—the most critical factor of all—design capabilities and architectural drawings—is entirely left to the local staff, resulting in a very low standard of work.

Part of the problem is that the people managing the site haven’t been properly trained, but the fact that everything is left entirely up to the subcontractors speaks for itself. Everyone—from the Japanese parent company to the local staff—is taking construction work lightly. There’s no way you can build anything decent that way!

The Ruthless Japanese

Second, there is absolutely no communication or discussion between the parent company in Japan and the local (overseas) site.

This happened on site. A young electrician came up to me, handed me a sheet of A4 paper, and asked, “Could you tell me what this says?” When I looked at the paper, it listed regulations regarding electrical wiring in Japan, such as the diameter of electrical cables and maximum current ratings.

What I couldn't believe was that they were casually handing out Japanese-language materials to foreigners. I just couldn't wrap my head around it—it made me feel disheartened, ashamed, and I found it unforgivable!

When I asked, “Who gave you this?” the name of a Japanese man rumored to be the next president came up. To be honest, I was flabbergasted. But that’s the reality of this company.

After I translated and explained the contents of the document, I asked, “Is it always like this?” and was told, “Pretty much!” When I asked, “But you probably don’t understand what it says. What do you usually do?” they replied that they take it to the office and discuss it with everyone, looking at the numbers and saying things like, “This must refer to that,” and somehow manage to figure it out.

When I asked, “Why don’t you just say, ‘I don’t understand Japanese, so at least give me the materials translated into English!’?” he replied, “I can’t ask for something like that.” I asked some other people about it, and they said this wasn’t just a one-time thing—it happens every time. When I said, “Even if things seem to work out somehow, there’s still a chance of misunderstanding, and that would be a problem, wouldn’t it?” they looked uncomfortable and replied, “But it’s always been like this…”

I was furious. It’s because of things like this that communication and information sharing don’t work properly, and I felt ashamed at how pathetic and appalling it was that Japanese people actually think this is acceptable. At the sites run by this parent company, there’s virtually no communication—let alone any meaningful discussion. I never imagined it would be this bad. At this rate, nothing we do is ever going to work out.

Anyone reading this will probably think, “No way! Are you serious?!” but this is a true story. It’s not the kind of story you’d normally publish, but I want you to know that things like this actually happen on the job!

 

The God of Construction

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