Key facts
- Japan's inflow of skilled foreign professionals has slowed since last fall.
- Artificial intelligence is denting demand for IT workers and translators.
- The Japanese government is tightening criteria for skilled foreign professionals.
- The government will raise income requirements for skilled foreign professionals.
- A survey found 23% of surveyed companies plan to cut graduate recruitment for fiscal 2027.
- AI is expected to replace at least some current duties for 66 companies by 2030.
Japan's steady influx of skilled foreign white-collar workers has slowed since last fall, influenced by the increasing capabilities of artificial intelligence and government efforts to tighten residency status rules. AI is reducing demand for roles like IT workers and translators, while the government is also raising income requirements for highly skilled professionals to emphasize talent over other factors.
A survey of 111 leading Japanese companies found that 25 intend to cut their graduate recruitment for fiscal year 2027, a 23% increase in such plans year-over-year. This comes as companies increasingly cite labor-saving through digitalization and operational efficiency, with AI expected to replace a significant portion of current duties by 2030. New graduates and younger employees are identified as the most exposed to this displacement.
In response to these shifts, some companies are strengthening mid-career hiring, seeking individuals who can contribute immediately. This marks a departure from Japan's traditional recruitment model of hiring graduates en masse and training them internally, as the value of traditional entry-level training diminishes with automation. The overall labor shortage in Japan, driven by a declining birthrate and aging population, remains severe, prompting companies to continue hiring foreign nationals despite the tightening rules.