Masafumi Ito had been working at Amazon’s Tokyo office as a salesperson for six years when his problems at the company started, he recently told Rest of World. His job was to convince third-party merchants to use Amazon Prime, and he had always thought of himself as a diligent employee. But out of the blue one day in February 2019, his boss told him he was being put on a “coaching plan,” a prerequisite to the company’s notorious performance improvement plan, or PIP.
Amazon has argued that PIPs are a way to help staff develop and learn. But critics say they’re a thinly veiled mechanism to arbitrarily force workers out, particularly those, like Ito, who question its brutal work culture. “The PIP is similar to a coaching plan, but at Amazon, it’s like a death sentence,” Ito, who is also a union leader, said. “Employees are often set unachievable goals, and if they don’t achieve them, they are considered incompetent.”
For two years, Ito stumbled through several PIPs and disciplinary actions at Amazon. Then, this past February, he said, the company finally asked him to resign for failing to meet the requirements of his latest evaluation. After he refused, he said his job was terminated. His firing has now ignited a fresh dispute in Japan over Amazon’s use of PIPs and its alleged union-busting activity in the country.
Amazon has been criticized all over the world for practices that its opponents say are anti-worker. The company has become especially infamous for pushing warehouse associates and delivery drivers to work at breakneck speeds, and then firing those who can’t keep up with the pace. Amazon has also gone to extreme lengths to quash labor organizing efforts, including during a failed union drive in Alabama earlier this month. In the company’s 26-year history, its workers have successfully unionized in only a handful of countries, including Japan.
But Ito’s experience in Tokyo also reflects Japan’s unique work environment, where, thanks to both legal and cultural norms, many employees in white-collar sectors can expect to stay at the same company for the length of their entire careers. “These [PIPs], although they could offend workers in many places, might be particularly offensive in a Japanese workplace,” said Andrew Gordon, a professor at Harvard University who studies Japanese labor history.
Amazon entered the Japanese market in 2000, only a few years after the company was founded. Online shopping was initially slow to take root in the country, but over the past few years, it’s started to take off. Amazon earned more than $20 billion in Japan in 2020, up almost double from 2017. It now commands around a quarter of the country’s e-commerce market, putting it ahead of homegrown rivals like Rakuten. The company recently began pushing into new product categories in Japan, and in February, the Japanese government reportedly chose Amazon Web Services, the company’s cloud computing division, for a state contract worth roughly $275 million (30 billion yen), according to Nikkei Asia.
Amazon has also faced many of the same criticisms and growing pains in Japan as it has in other parts of the world. The company was the subject of an antitrust investigation there last year, which resulted in payments nearing $19 million to product vendors it was accused of charging unfair fees.
Amazon workers in Japan unionized as part of the Tokyo Managers’ Union (MU) in 2015. Unlike in the U.S., they didn’t need a majority vote in order to be recognized and engage in collective bargaining — two or more workers have the right to freely form a union. Takeshi Suzuki, the chairman of MU, said that dozens of workers have joined the Amazon Japan Union over the past few years, but they represent only a small fraction of the tech giant’s thousands of corporate employees in the country.
From the start, PIPs have been a controversial issue among union members. Amazon has said the plans offer a clear way for underperforming employees to set goals and measure their progress, but workers in the U.S. have described a discriminatory and often cruel system.
In 2014, an employee in the U.S. shared details about the PIP program to Gawker, which the publication described as “Kafkaesque.” The following year, a scathing New York Times investigation into Amazon’s corporate work environment described how employees, one who had breast cancer and another who recently had a stillborn baby, were placed on PIPs, code for “you’re in danger of being fired.” (Amazon forcefully pushed back against many of the claims in the article.) In the fall of 2016, an Amazon employee in Seattle reportedly jumped off a company building and was injured after being placed on a PIP.
Around the same time in Japan, a member of the Amazon Japan Union told the news outlet Toyokeizai Online that they were placed on a PIP after being diagnosed with depression.
Rest of World reviewed an internal manual for Amazon supervisors in Japan that instructs them to identify the bottom 10% of workers each year and push them to raise their performance, using tools like PIPs. The tech giant expects those who fail to meet expectations will leave the company voluntarily. (A similar system in the U.S. was reported by news outlets a few years ago, and Amazon said at the time that it was in the process of changing how it evaluated employees.)
“[I have heard that] some managers were given a ‘target’ for the retirement rate within their team, and if they didn’t achieve it, they were judged to be incompetent as managers,” Ito said. “However, no one with a human heart would want to push a colleague who has worked with them for a long time into resignation. As a result, people who have been with the company for a few months or so are now being targeted.”
A current Amazon Japan warehouse manager in their 40s, who asked to remain anonymous for fear of retaliation, said he was put on a PIP after only six months on the job. “I was still in the process of getting used to the new environment,” he said, but Amazon insisted he wasn’t capable of doing the work. The employee said the pressure caused him to develop headaches and other health issues, and he eventually was diagnosed with an adjustment disorder. He believes he was targeted for the PIP because he is part of the union.
A spokesperson for Amazon Japan said the company couldn’t comment on individual disputes or share performance improvement plans, for confidentiality reasons. “We work closely with our employees to develop their careers at Amazon, using a multitude of programs, including training, coaching, mentorship, and others, each of which is tailored to their specific strengths and development areas,” the spokesperson said in a statement.
After World War II, many corporations in Japan began providing workers with what essentially amounted to lifetime employment, a practice that’s still common today (though there are now far more so-called “non-regular” employees in the country, who are entitled to fewer protections). The system was codified through a series of legal precedents in the 1950s and 1960s, Gordon, the Harvard professor, said, which limited how and when companies could terminate their workers. If an economic downturn forced a factory to shut down, the company would be required to move the employees to a plant in another city before laying them off.
In the ’60s and ’70s, Gordon explained, many Japanese companies began using some form of performance evaluations, and it became common for star employees to receive larger raises. “But these aren’t used to fire people; I think that’s the kicker,” Gordon said. It remains controversial and, in many cases, illegal for companies to terminate workers in Japan without significant justification. “It’s possible, basically only in conditions where business is bad and changing, and then it has legitimacy. But here, we’re talking about a company that’s thriving,” he said.
Ito said he now plans to file a lawsuit against Amazon for illegal termination. A number of similar cases have been filed in Japan against foreign companies in recent years. In 2017, an AstraZeneca employee in Japan sued the company after it reduced their pay and title for failing to improve on a PIP. The Tokyo High Court ruled in the employee’s favor the next year.
“The employment practices of foreign companies such as Amazon differ from those of Japanese companies. However, even foreign companies should follow the Japanese labor laws,” said Munetomo Ando, a professor at Nihon University in Japan who specializes in labor economics and contract theory. “In Japan, abuse of the right to dismiss without reasonable cause is prohibited.”
The core of Ito’s argument is that his dismissal had nothing to do with his performance. When he was first put on the coaching plan in 2019, Ito was asked to set a specific goal for the number of new clients he would find. He met his target within a month, he said, but he was then assigned a new supervisor, who Ito claimed refused to recognize the achievement.
Soon afterward, he was accused of a different offense: disclosing confidential company information to his business partners. Ito said sharing the information was necessary to onboard a new client, and that he obtained permission from his boss to do so beforehand. Last year, Ito filed a complaint with the Tokyo District Court about the issue. At the trial, Amazon didn’t specify which of Ito’s actions constituted leaking confidential information, and the bureau subsequently ruled in Ito’s favor in June.
Amazon appealed the decision and put Ito on what would become a series of different PIPs (the appeal is still pending). Now, Ito’s lawsuit will test whether Amazon’s relentless work culture, based on principles like “Hire and Develop the Best,” can survive in a country with strict labor laws, like Japan.
Suzuki, the chairman of the Tokyo Managers’ Union, believes that Ito’s firing shows Amazon is unfairly targeting union leaders. “It’s a move that echoes Amazon’s efforts to block unionization in other countries,” he said. Suzuki stressed that Amazon workers in Japan have the right to stand up against what they say are the company’s unfair actions. “We have to win the case to make it clear that Amazon’s attempt to prevent us from doing so is unacceptable,” Suzuki said.