Labor Shortage Bankruptcies Reach 441, Up 1.3x from Previous Year, Setting New Record; "Employee Resignation Type" Also Hits Record High of 118 Cases

Teikoku Databank, Ltd. conducted a survey and analysis on the occurrence of "labor shortage bankruptcies," which are caused by labor shortages due to employee turnover, difficulty in hiring, and other factors.

SUMMARY In fiscal year 2025, labor shortage bankruptcies increased by approximately 1.3 times from the previous year to 441 cases, setting a new record. The increase was particularly noticeable in labor-intensive industries such as construction, road freight transport, elderly welfare services, restaurants, and temporary staffing. Among these, "employee resignation type" bankruptcies, caused by the departure of employees or executives, reached 118 cases, also setting a new record.

Aggregation period: January 1, 2013 to March 31, 2026 Target: Bankruptcies with liabilities of 10 million yen or more, under legal liquidation

Labor Shortage Bankruptcies Reach 441 in FY2025, Employee Resignation Type Exceeds 100 Cases Labor shortage bankruptcies (legal liquidation, liabilities of 10 million yen or more), caused by employee turnover, difficulty in hiring, and rising labor costs, amounted to 441 cases in fiscal year 2025, an increase of approximately 1.3 times from the previous year (350 cases). This is the first time the annual total has exceeded 400 cases, marking a new record for the third consecutive year.

By industry, construction accounted for 112 cases, or 25.4% of the total. The construction industry has the highest percentage of companies feeling a labor shortage among all industries, and the severe labor shortage continues (Teikoku Databank "Survey on Corporate Trends Regarding Labor Shortage (January 2026)"). Cases where businesses became unable to continue due to a series of resignations of site workers and sales representatives with essential qualifications and skills for construction were prominent. Koka-gumi (Mie Prefecture, bankrupt in February 2026), a scaffolding construction company, was driven to bankruptcy partly due to a chronic deficit caused by a shortage of skilled workers and the rising labor costs to compensate for it. In addition to the road freight transport industry (55 cases), which faces serious issues of driver shortages and aging, labor-intensive industries such as elderly welfare services (22 cases), restaurants (21 cases), and temporary staffing (12 cases) also set new records for their respective industries.

Furthermore, among labor shortage bankruptcies, "employee resignation type" bankruptcies, caused by the departure of employees or executives, totaled 118 cases. This is the first time the annual total has exceeded 100 cases, and it has increased for the fourth consecutive year. Livedic (Miyagi Prefecture, bankrupt in September 2025), a bridge construction company, was forced to abandon its business after a series of employee resignations made it impossible to secure the usual volume of construction orders. Japan Kogaiguchi Management Center (Tokyo, bankrupt in October 2025), which handled cleaning and maintenance of septic tanks, was forced to cease operations due to the consecutive resignations of several young employees in 2025.

Companies report that "there are few applicants with the required skills, and even if there are applicants, they tend to go to other companies with higher wage levels." Wage increases are particularly difficult for small and medium-sized enterprises. While it is now essential to build overall attractiveness including factors other than wages, the continued rise in prices and lack of improvement in profitability may lead to an increase in companies forced to abandon their businesses.