(Bloomberg) -- A rising number of blue-chip Japanese companies are cutting staff — a move that used to be seen as a last resort — as a historic boom in the Nikkei puts pressure on firms that have missed out.

Last week, the country’s largest cosmetics brand Shiseido Co. said it was offering early retirement for about 1,500 positions at home. That was days after Omron Corp., a maker of thermometers, sensors, relays and switches, said it would cut about 2,000 positions worldwide, with half to occur domestically. The Kyoto-based manufacturer said it was buying out employees 40 years and older who’d been employed for three years or more.

Such announcements are rare in a country where labor laws are among the strictest in the world. But pressure is mounting on any outliers to a rally that’s lifted the Nikkei 225 Stock Average to a record high. While their peers’ stock prices soar, Shiseido and Omron have slumped roughly 40% from their respective peaks last year, as they grapple with a slowdown in China that’s eroded their bottom lines.

For the stragglers who’ve so far missed out on the Nikkei’s historic price surge, pressure is mounting to show investors they’re making changes necessary to kickstart earnings momentum.

Shiseido’s move would bring improved profitability in domestic operations, Citigroup analyst Shuhei Oba said. As for Omron, Jefferies analyst Masahiro Nakanomyo said he expected earnings to improve after completion of the adjustment phase, although he said “lack of recovery sentiment is likely to linger for the time being.” 

After announcing its early retirement program, Shiseido’s stock rose 2.5%. Omron’s shares also rose 1.9% following its announcement. 

Shiseido’s shares have struggled as its operating profit for the fiscal year ended December fell 40% on tumbling demand in China, which generates about a quarter of sales. Omron, whose switches are used in factory lines, was also hurt by the manufacturing slowdown in the world’s second-largest economy. It’s also grown to rely on China for about a quarter of sales.

Early retirement is Japan’s go-to method of reducing staff. The number of publicly traded companies that offered such packages rose for the first time in three years to 41 companies in 2023, according to Tokyo Shoko Research Center. Medium-sized and large-sized companies could announce more of these programs this year, it said.

Last week, Sony Group Corp. said it was laying off 900 people across its video-game division, or about 8% of its employees, and close a game studio in London. Wacoal Holdings Corp. also said last week that a bigger-than-expected group of 215 people applied for its job buyout program.

--With assistance from Grace Huang.

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