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Shrinking U.S. Demand Spurs Layoffs At Japanese Toyota Plant

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TOKYO — Japanese automaker Toyota has laid off 800 people at a plant in southwestern Japan, or about 10 percent of the plant's work force, in response to declining sales in North America, a company official said Tuesday.

All the job cuts _ carried out in June and August at Toyota Motor Corp.'s wholly owned subsidiary Toyota Motor Kyushu _ applied to workers sent by job-referral agencies. Japanese companies are increasingly relying on such agencies for temporary workers called "haken" to be flexible to market demand.

Prior to the layoffs, Toyota Motor Kyushu, which makes Lexus luxury models, had employed 8,200 workers _ 1,950 of them haken _ an official said on condition of anonymity, citing company policy.

Many Japanese companies demand individual names be left out of comments to the media even if they are official spokespeople.

The official said the job cuts were temporary and 500 haken workers will be brought back later this year. He declined to comment on why they would be needed back, saying product plans can't be released.

The shift to temporary workers or haken marks a change for major Japanese companies, including Toyota, which used to encourage corporate loyalty among its ranks by offering lifetime employment. Haken agencies have become booming businesses but have set off a spate of social problems such as poverty and discontent, especially among the young.

The trend toward these temporary workers drew alarm in Japan when a disgruntled haken employee at a Toyota affiliate went on stabbing spree in June in a crowded Tokyo shopping district, killing seven and injuring 10.

The remarks of Tomohiro Kato, the 25-year-old haken worker, expressing frustrations about job stability and getting treated with no respect, added to the public worries about the trend.

Toyota, which employs about 12,000 contract and haken workers, about 15 percent of its 80,000-strong work force in Japan, issued a condolence statement for the crime victims at that time.

Toyota has avoided the losses of its U.S. counterparts like General Motors Corp. and Ford Motor Co. But it is projecting its first full-year profit drop in seven years for this fiscal year through March 2009. Toyota reports first fiscal quarter earnings Thursday.

Last month, Toyota lowered its global vehicle sales plan for this year by 350,000 vehicles to 9.5 million vehicles, blaming the sluggish North American market. The pace of Toyota's growth has been slowing to a 1 percent gain this year in contrast to a 6 percent climb in 2007.

Toyota saw its U.S. vehicle sales plunge 12 percent in July on year as it struggled to keep up with consumers' growing demand for smaller, more fuel-efficient vehicles.