Report: Toyota’s First Layoffs Since 1950??


Report: Toyota considers cutting 1,000 jobs –

With the down economy, there had been much discussion about whether Toyota could continue it's “no layoffs (of permanent employees)” streak going. That may end soon, sadly:

Toyota is considering cutting more than 1,000 full-time jobs in North America and the United Kingdom to cope with faltering global demand, a news report said Friday.

The details of the job cuts will likely be finalized by the end of the month, said the Nikkei, Japan's top business daily, citing an unnamed senior company official. Japan's top automaker could slash more jobs in other regions if global auto sales continue to slump, the daily said.

If Toyota resorts to cutting full-time staff, it will be the first time since 1950, when the automaker reduced 1,600 full-time jobs in Japan, the Nikkei said.

In 1950, then-president Kiichiro Toyoda resigned in shame after 1,600 employees took early retirements, according to the Toyota website.

…battled for months for the sake of his employees, but ever-worsening conditions showed the company to be unsustainable without significant change. Recognizing that if the company disappeared, so too would the livelihood of all Toyota employees, Kiichiro realized that lay-offs could not be avoided. With sorrow in his heart, he explained the circumstances to his workers, which led to 1,600 voluntary retirements. Management then vowed that this would be the first and last time such an event would come to pass at Toyota, and, in a gesture of respect to former employees, Kiichiro resigned from his position as president of the company.

Considering a Toyoda family member is now CEO, newly named, I doubt a similar resignation would occur this time. Akio Toyoda has a rough road ahead. It will be interesting to see how apologetic Toyota leadership is. Will they blame themselves for overexpanding their capacity, particularly with trucks, or will they blame the “credit crunch” like most everyone else is?

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


  1. For some perspective, Harley (a company that I believe has some pretty successful Lean efforts) is laying off over 1,000 because of falling sales.


  2. Microsoft also is laying off people, in spite of being profitable last year. I believe about 5,000 people are being let go. They say they are being “proactive.” Hmmmm…

  3. Mark – this is something they’re going to have to navigate. There’s a difference between falling sales and layoffs being driven by kaizen activities.

    If you don’t have the sales volume, that’s a different story, right?

    But, employees might not see it that way… I wonder if we’ll get any reports or comments from some Toyota employees?

  4. Yep. Agreed on the point about sales volume. I don’t know the full story – just heard on World News last night that in spite of being profitable they are laying off 5,000. Don’t know how profitable they’ve been or project to be, or if they’re a lean organization or not. Just kind of made me raise an eyebrow being profitable yet laying people off.

  5. I hear ya, anon. I was, in my last comment, referring to Toyota and their sales drop. Toyota lost money but has a ton of cash on hand.

    Microsoft’s situation isn’t one I can really comment on. I had read how Microsoft supposedly has a philosophy of avoiding mass layoffs (just getting rid of bad performers as needed).

  6. Hi Mark,

    Laying-Off people can be played in different ways: good and bad ways.

    Bad: just kicking people out not giving them support

    Good: putting people out of normal processes and the organization enabling them to forster their strengths that could be of good to the company at a future time.

    So you could even increase the value creating force of your company through put specific people on the outside (as the leverage point to future even better success).

    I am pretty confident that Toyota folks are considering such steps – if I would be them I would take these possibilities into account.

    Just think of BMW in Germany, where 26.000 employees are said to be on reduced hours shortly (not being clear whether that will be already the end of downsizing, coming from 8.000 minus last year).

    Putting people off can really lead to vicious cycles as the really good and entrepreneurial thinking ones will leave the boat as first. Controllable ones will stay on the boat until that will sink in the rough seas of the economic ocean:-(

    It is a pity that for managers and decision makers these things are never (almost) clear and understandable (sure they live in another world!).

    Looking forward to the out-of-the-box solution from Toyota on that rather tough issue.

    Actually during the months of idling in the Tundra plant there are probably people who have gained special skills for their own personal strive so that there will be found good ways to further cope with the crisis – despite the huge downturn of sales.

    Quite optimistically cheers,


  7. Laying off means just a mere number and event!

    We have to know the special cornering efforts that go with such lay-offs (such as special sabbatical arrangements, special payments, providing other help through company networks, etc.).

    It is like in Lean Thinking, just applying the tools is not enough, you have to understand the lean culture;-))



  8. I work for Toyota in Indiana and we are all nervous. I have plenty of seniority, but I’m still nervous about a total collapse of the domestic mfg. business (incl. Toyota). I hope Toyota considers buy-outs so that people who want to leave…will voluntarily and the ones who want to stay will be able to. This storm (economy) will not get better anytime soon and when it does, companies will be reluctant to hire. Everyone’s cautious about everything…houses, cars, and other big purchases. Toyota is suffering bad and they must do what they have to. I see companies shedding 5-15 percent of their workforce…I see more cuts at Toyota before it’s over. Good luck to everybody in keeping their jobs. It’s gonna be a rocky road for the next 12-18 months or even longer.

    • I was there for 16 yrs.I was a stamping dept lead man.
      I left on july 18th ,2008.I accepted a buy out….omg.
      What a mistake.I opened my own cybercafe here in san pedro,ca where I live just 17.5 miles away from TABC.I had to close it .
      The storm as you call it ,was a dam hurricane.I lost everything.
      I’m now 51 and white and not bilingual which is required for 40% of manufacturing jobs here in southern calif.I was lucky though to have found work 7 months after closing my business.
      But…was laid off again.I’m once again unemployed and searching like crazy everyday.the agreement said after accepting the pkg ,I cannot be rehired by toyota..TABC isnt looking so good either.
      over 200 of the folks I knew from 92 to 08 are gone.

  9. I am also a Toyota employee in Indiana,and we are all highly aware that Toyota will have to make difficult decisions and take purposeful steps to protect the overall health of the company.

    Speaking only for myself, even as an hourly wage earner I would rather take an eqivalent pay cut than see any of our team laid off. There is still a bonus program in place, and I think that would be the first logical reduction to make before even considering shedding employees. Toyota has won a lot of loyalty from employees by retaining them amidst the constant negative news from other manufacturers, and the economic downturn. That priceless loyalty could just as easily be lost if the leadership decides to reverse all their frequent statements of company commitment to our employment security.

    I belive there are many options that TMC is currently cosidering, and from what I have seen in my seven years of employment at Toyota they will make the choice that best benefits the company and its employees.

  10. Im a Toyota employee in West Virginia. Everyone here is nervous
    as well. We all know Toyota has always been loyal and we appreciate it. A company can only
    be loyal for so long !! Our plant is really suffering right now. We all expect some layoffs before this thing is over.

  11. I work for Toyota(TABC) in Long Beach, California. Production is down by more than 50% and to some departments even more. The extra manpower are undergoing training and skills upgrade which they say would benefit Toyota in the long term. Everybody hopes that there would be no layoffs in the future though we know that the economy has still to see it’s worst.
    As for Toyota…”adversity doesn’t create character, it reveals it.”
    Let’s see what the company is real mad of.

  12. I also work for toyta (tmmk) We have reduced production also. Plant one is going to a 124 second tack time. and plant 2 has reduced production to around 350 units per shift. Our venza ratio is going up to 47%. All our contracted help has supposedly been given a 60 notice to be let go. And supposedly team members will take over those jobs. And the last we heard all the temps will be gone by march 23rd but i doubt they will be around that long. Even though we produce the most cars and was the only plant to make a profit last year we are still nervouse about the reported lay offs. I also heard that toyota will be offering early retirement. I read somewhere on the net that after the reported loss toyota has around 58 billion to operate on so hopefully that will help get us all through this.

  13. I really don’t want to sound mean here…. we are concerned for your jobs at Toyota (for those of you as individuals, not because of some “no-layoff policy” that us lean geeks love to talk about)…

    But I have to question Toyota’s training if an employee is on here calling it “tack” time instead of “takt” time. That’s a pretty basic lean concept, right?

  14. I’m sorry, hard to believe “tack” vs “takt” is a typo.

    Talt time is a typo.

    If my doctor said I have “newmonia”, I’d question if that person was really an MD. That’s not a typo either.

  15. Seriously? Leave the takt thing alone. If this person was using spell check it wouldn’t even recognize takt. I also think you should have a little tact in giving these people a break. I would think that a true lean advocate would be more sensitive to all of this.

    By the way you don’t hear Toyota asking for bail out money do you? Whose training and sustainability is really in question here?

  16. Yes, let’s try to keep things civil and on the point of the topic, not discussion about commenters or personal attacks. Everyone’s normally good about that here, so let’s keep that up.

  17. I also work @ TABC in Long Beach and as of this week in May of 2015, 96 TMs are going to loose their jobs. I’m right there in the border of that number and I’m telling, It’s a very scary and sad thought. I know Mike as well. I worked with you on second shift at 6C line. Anyhow, I wondered why you would even take that dumb package! You would still be there today brother. Oh well, I’llknow more of my fate by this frFriday. Toyota isn’t what it was when I joined in 12 years ago. Manufacturing is a very unstable field to be in at this point.


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