Increase in remote work drives businesses to move out of Tokyo

With employees continuing to work remotely, more companies in Japan are shifting some functions of their head office out of Tokyo.

In October this year, telecommunications firm NTT began shifting some head office functions like general affairs and corporate planning out of Tokyo’s Otemachi district on an experimental basis, to Takasaki, Gunma Prefecture, and Kyoto City, reported The Japan News.

Employees in NTT’s general affairs department and other related sections can now telecommute and live anywhere they like. Such an arrangement would also allow the firm’s operations to continue as per normal should a major disaster occur in Tokyo.

Craft beer maker Far Yeast Brewing also moved its headquarters to the village of Kosuge, Yamanashi Prefecture, from Tokyo’s Shibuya Ward in June last year, a move that it said reduced fixed costs. Employees might have quit if they were asked to relocate due to a corporate transfer, but that did not happen as they could work remotely, the company said.

To promote regional revitalisation, Japan’s central government has provided tax breaks for companies that move their head office functions to rural areas. Yet some companies said it is difficult to leave the densely populated city of Tokyo, due to its high population density.

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Keiji Kanda, a senior economist at Daiwa Institute of Research, explained, “More companies will move some of the head office functions to rural areas, as the pandemic showed us which jobs can be done remotely. But there are still advantages to having a head office in the Tokyo metropolitan area, where transportation is convenient and information is gathered.”