TT-507 -- Recruiters Take a Hit, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, Mar 1, 2009 Issue No. 507

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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+++ WHAT'S NEW

One sector that is getting hugely pressured in the current
downturn is the recruiting industry, a sector that
prominently features foreigners and foreign firms, both on
the client and vendor sides. We're not hearing much about
the fall-out on this sector in the press, perhaps because
most of Japan's 10,000+ licenced recruiters focus on
foreign firms and thus are not particularly relevant for
Japanese companies. However, the developments in the
recruiting sector are certainly relevant to our readers,
and make for interesting reading to boot.

On February 20th, leading technology recruiter, Access
Technology, went bankrupt. The failure was not reported in
the press at all, and unless you were one of the company's
30 or so consultants to lose their job, you might not have
even noticed it. The company was founded by industry
pioneer Paul Levine in 1993, and thanks to a focused
investment in off-shore call centers, was able to build up
what was probably the best database of bilingual technology
experts in Japan. Many foreign firms found CEOs thanks to
Access' efforts. At its peak, the company had more than 70
consultants, and was reportedly doing more than JPY1bn of
business annually. It was on this basis that the company
was sold in 2008 to a Japanese investment fund called Wise
Partners, a unit of the Development Bank of Japan (DBJ).

The Japanese announcement on the Access Technology website
says that the business took a turn for the worse upon the
Lehman Brothers collapse, and calls the subsequent hit on
the recruiting industry a "once in a hundred years" event.
The message then ends with a promise to make fair and
proper payments by the receiver to vendors and customers.
Unfortunately one party who won't be getting repaid is Wise
Partners who must now be regretting jumping in to this very
cyclical business. The price they paid was never made
public, but given the frenetic activity within the industry
during 2007 and early 2008, we imagine it would have been
considerable.

[Continued below...]

--------- BIOS - Bilingual IT Systems and Support ---------

Formed in 1998, BiOS is a full-service IT solutions
provider, delivering SI and business support services to
foreign multinationals, including some of the world's
largest banks, logistics, and retailing companies.

Service Offerings:
* IT Infrastructure Projects, Office Setups/Relocations
* MS Office Training, Hardware/Software Procurement
* IT Personnel Outsourcing and Recruiting
* BiOS NetCare: Bilingual IT Service Desk and Support
* BiOS Advanceserve: Secure Online Data Backup (free trial)

BiOS is committed to providing quality services at
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Phone: 03-5773-3090, Email: solutions@biosjp.com
Web: www.biosjp.com
-----------------------------------------------------------

[...Article continues]

But it's not just Access Technology, the entire industry is
under huge pressure and many other firms are either
downsizing or switching business models in order to
survive. Numbers for the sector are generally not
available as it is still a very fragmented cottage industry
in Japan. However, the results for the industry's only
listed recruiter, JAC, tell an ugly story. This company
listed in December 2006 with the surprising price of
JPY27,800 per share. On February 17th, JAC's share price
fell to a record low of just JPY1,510, about 5.5% of the
peak. There are bound to be some very disappointed
shareholders around right now.

JAC's share price collapse stems from the fact that the
company reported a loss of JPY833m (US$8.58m) on sales of
JPY7.79bn (US$80.3m), as compared to a profit of JPY451m
(US$4.65m) on sales of JPY7.96bn (US$82m) for FY2007.
Given that as Access Technology's web page says, the Perfect
Storm hit around Q3 2008, one wonders what will happen to
JAC's sales and profits for 2009. We wouldn't be surprised
to see its current market cap of just JPY1.149bn (US$11.1m)
sink to half of what it is now -- thus possibly triggering
an 'insufficient capital' warning from the exchange and
subsequent delisting.

One way recruiters are coping is to move to related
businesses. We are seeing a greater presence in the
outsourcing market by recruiters, where companies are
reasoning that with the increased availability of qualified
candidates, if they can't place them permanently at least
they can put them to work on a temporary basis. While
outsourcing seems like a natural extension of recruiting,
what new players quickly find out is that outsourcing
customers expect quick turn-around and continuity of
services -- both difficult requirements if you don't have
full-time resources in the back office to drop in when
outsourced staff get sick, take holidays, etc.

In past downturns, another potential outlet for recruiters was
outplacement -- the outsourced handling of terminated
employees for large employers. Some operators, most notably
Drake Beam Morin (DBM), made huge amounts of money by
charging companies up to JPY1m (US$10,300) per ex-employee
to counsel them and find them new jobs. They were able to
do so because firing full-time employees in the 1990's was
still a big no-no, and the government wanted companies to
do all they could to ensure that the process was
civilized.

DBM went public in 1997 on this trend and did really well
for a while. However, companies started realizing that the
government was backing off from its lifetime employment
goal, and were allowing lay-offs to happen so long as they
were defendable. As a result, DBM was taken over by
Thompson and eventually by staffing company Meitec (in
2004). Looking at Meitec's financials now, we see that this
company has lost about 40% of its market value over the
last 3 months, and we wouldn't be surprised to see it report
a loss for the current quarter and a much-reduced Net Profit
for the FY2008 period, ending this month (March).

Apart from going into hibernation for the next 12 months,
probably the other viable option for struggling recruiters
is to sell themselves to companies naturally aligned with
the recruiting world -- such as IT and consulting firms.
This is exactly what happened with the Fusion Systems
acquisition of Ingenium Partners several weeks ago.
Although one might wonder why Fusion is making its move
during the down leg of the economy, the benefits are
clearly there for them to take advantage of the union.
The benefits include cheaper and more effective recruiting
for their own IT operations, advance warning of what is
going on in the market (by virtue of CEO searches), and
perhaps most importantly, a whole new level of highly
placed connections.

We wouldn't be surprised to see similar synergetic unions
occurring over the next few months. While recruiting firms'
balance sheets may look terrible and they are still actively
shedding staff, the real value lies in their relationships with
their customers and of course their databases of
candidates. These are both rich prizes to IT and consulting
operators in a market which will always have a shortage of
bilinguals.

********************

Our Entrepreneur Handbook Seminar is obviously filling a
need in the community right now, as many people look at
their employers and see the writing on the wall. We had a
sell-out audience of 35, and still more people wanting to
attend. So, we have decided to re-run the seminar next
month for those people unable to make it this month. The
new date will be Saturday March 21. Details can be found
at:
http://www.japaninc.com/entrepreneur_handbook_seminar

Lastly, Terrie's Take is proud to be a supporter of The
Japan Helpline. To get help 24 hours assistance with any
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go to www.jhelp.com and click `help`.

To donate:
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Your support keeps The Japan Helpline going.

...The information janitors/

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-----------------------------------------------------------

+++ NEWS

- 100MW wind farm for Nagasaki
- Usen new shares issue flops
- Cell phone novels hit big time
- Advantest to fire quarter of workforce

-> 100MW wind farm for Nagasaki

Japan's largest wind farm site is being proposed for the
Goto Islands, off the shores of Nagasaki. Japan Wind
Development has announced plans to build a 100 Megawatt
wind farm for around JPY26bn. The new facility will
comprise 50 turbines sited on Ukujima, the northernmost of
the sparsely populated islands, and which is subject to
strong head winds for most of the year. Undersea cables
will connect the new wind farm to the city of Sasebo.
(Source: TT commentary from nikkei.co.jp, Feb 27, 2009)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20090226D26JFA04.htm

-> Usen new shares issue flops

Even previous high-flyers are having problems finding
operating funds at present. Internet carrier and ISP Usen
has said that it is downsizing its issuance of new shares
from JPY5bn to JPY3.9bn, after finding demand for its
shares was low. In a sign of the times, the shares carry a
compulsory dividend of 8.5% p.a. -- what other people might
call a relatively high interest rate. ***Ed: Indeed, when
you see that most of the shares were sold to "friends of
Usen", one can imagine that demand for the shares may have
in fact been almost zero. The buyers were announced as
Hikari Tsushin, H.I.S., Funai Electric, and 5 others.**
(Source: TT commentary from nikkei, Feb 27, 2009)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20090227D26JFA22.htm

-> Cell phone novels hit big time

An interesting article from CNN discusses the success of
author "Yume-Hotaru" (his pen name) in publishing a novel
for distribution on cell phones. Apparently he wrote the
novel on the cellphone as well, typing with just his thumb,
and posting to his Mobage-Town SNS site between classes
and while traveling on the train and bus. His first story
was called "First Experience" and after being recreated in
print became a Number One bestseller in Tokyo. CNN says
that in 2007, 5 of the nation's best-sellers were written
on cell phones, and that the market size for cell phone
novels and manga reached JPY24bn -- about 5% of the overall
market for cell phone digital content. It appears now,
though, that the trend is cooling, and in 2008, fewer
best-sellers were written this way -- but nonetheless, the
top cellphone novels can still sell more than 1.7m copies.
(Source: TT commentary from cnn.com, Feb 27, 2009)

http://www.cnn.com/2009/TECH/02/25/japan.mobilenovels/

-> Advantest to fire quarter of workforce

As a sign of how serious the decline in electronics
manufacturing is, and will be for the next 6-12 months,
leading semiconductor equipment manufacturer Advantest has
announced that it will incur a record JPY80bn loss and
consequently plans to fire 25% of its employees, amounting
to some 1,200 people. Orders at Advantest during the last
quarter of 2008 plunged 71%. The company reckons that the
chip tester market, one of its strong points, will contract
by 43% this year, coming on top of a 26% fall last year.
(Source: TT commentary from reuters.com, Feb 25, 2009)

http://tinyurl.com/cyrwga

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan, as well as other
employers of bilinguals.

** HIGHLIGHTED POSITION(S)

BiOS is now accepting invitations for the role of
Enterprise Systems Integration Lead Project Manager for
placement within a worldwide Television services company.
As the Lead PM you will be overseeing a wide range of
projects that include configuration, installation and
deployment of Enterprise products, technical support for
newly developed products and services, as well as
providing software development and engineering skills to
support our client's product line.

Our client is looking for someone with at least 10 years
proven experience in the IT industry and also some
experience in the Broadcasting industry. This candidate
will possess knowledge and experience in server and network
installation, and will also have some software development
experience. Familiarity with Unix and Linux will be a plus.
In addition, you will be required to communicate with a
variety of teams and customers therefore need to have
polished communication skills as well as Business-level
English and Native-level Japanese.

Remuneration is JPY9m – JPY12m, based on experience.

** POSITIONS VACANT

- CCIE Security Engineer, European Telco, JPYnegotiable
- Enterprise Systems Engineer in TV co., JPY5m – JPY8m
- IT Support in Tokyo Law firm, JPY4m – JPY5m
- Escalation Analyst, I-bank, Okinawa, JPY3.5 – JPY4m
- Helpdesk and Desktop Support engineers - JPYvarious

Interested individuals may e-mail resumes to:

stuart.gibson@biosjp.com

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email stuart.gibson@biosjp.com.

Interested individuals may e-mail resumes to:
stuart.gibson@biosjp.com

-----------------------------------------------------------

+++ UPCOMING EVENTS/ANNOUNCEMENTS

--------------- HR Seminar on Dismissals ------------------

'How to Handle Your HR issues during the Economic Crisis'
CCH Japan presents 'Dismissal: Statutory view point
and Practical stand point'

Covered in the seminar are the following key topics:
- Lawful Dismissal
- Unlawful Dismissal
- Alternatives to Dismissal
- How to Handle 'Severance'

Date: Wednesday, March 4, 2009 1:30PM-5:30PM
Venue: Toranomon Pastoral Hotel (6F, Violet)
(4-1-1 Toranomon Minato-ku)
FEES: Terrie's Take Readers-JPY20,000+Tax
(Regular price-JPY25,000+Tax)

Please register from following URL:
https://www.cch-japan.jp/contents/register/form
Number of seats: 30 seats
Language: English
Speaker: Attorney from Anderson, Mori and Tomotsune LLP
For more details, Please Contact us at: support@cch.co.jp,
or 03-3265-1161
www.cch-japan.jp
-----------------------------------------------------------

------------- Entrepreneur Handbook Seminar ---------------

Our Entrepreneur Handbook Seminar is obviously filling a
need in the community right now, as many people look at
their employers and see the writing on the wall. We had a
sell-out audience of 35 and February, and still have more
people wanting to attend.
So, we have decided to re-run the seminar next
month for those people unable to make it this month.
The new date will be Saturday March 21.

Details will be posted on the website shortly, at:
http://www.japaninc.com/entrepreneur_handbook_seminar
-----------------------------------------------------------

------------------- Smartphone Showdown -------------------

Time: Thurs. March 12, 2009 from 7pm to 10pm
Location: The Pink Cow (www.thepinkcow.com)
Organizers: Mobile in Japan, Tokyo PC Users Group, Digital
Eve
Cost: 1,000 yen, (incl. snacks, TPC member rates apply)

Event Description:
Join the Tokyo PC Users Group, Digital Eve Japan and the
Mobile in Japan Community for an evening of debate on the
merits and demerits of the increasing array of smartphones.

Learn about the benefits of a smartphone over a regular
Japanese keitai, features of various brands (iPhone,
Windows Mobile, Nokia, Blackberry, Palm and Android), and
developments we can expect to see.

Please RSVP at: event-reg@mobileinjapan.com
http://www.mobileinjapan.com/events/smartphone-showdown
-----------------------------------------------------------

----------- Entrepreneur Association of Tokyo -------------

Speaker: Tei A. Gordon, President and CEO of gEco Holdings,
LLC, Importer of Kona Brewing Co., Hawaii

Tei is a serial entrepreneur who has founded his first
company when he was 12 years old. In 1999, with two
partners, he started a VC and M&A company 'Aja Ventures.'

He has held various management positions, including: at his
family energy conservation and engineering company; as a
trader in the food section of Mitsubishi Corporation; and
as an Advisor to JETRO. He is also a guest
business-strategy lecturer at Waseda University's extension
campus -- the 'Nakazawa Academy.'

Tei's latest venture is assisting 17 wineries, 4
distilleries and Kona Brewing Co., to market their products
in Japan. Tei will be conducting a tasting of his Kona Beer
during the seminar so this is one event you don't want to
miss!

Please sign up early while seats are available.

Date/Time: Tuesday, March 3rd-Doors open at 6:30,
Seminar starts at 7:00
Location: The Foreign Correspondents' Club of Japan
Language: English
Website: http://www.ea-tokyo.com
-----------------------------------------------------------

______________________________________________________
Events announcements are priced at JPY50,000 per week.
For more information, contact sales at japaninc.com

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** No feedback or corrections this week.

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+++ ABOUT US

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