Foreign White-Collar Workers Squeezed Out by AI as New Arrivals to Japan Plunge 40%

【Financial News, Tokyo = Correspondent Hye-jin Seo】The number of foreign white-collar professionals newly entering Japan to work has fallen by 20% to 40% year on year so far this year. The decline reflects both the spread of Artificial Intelligence (AI), which has reduced entry-level jobs in information technology (IT) and interpretation and translation, and the Japanese government’s tougher screening of employment visas. Analysts say Japan, already facing worsening labor shortages due to its declining birthrate and aging population, is caught in a dilemma between attracting foreign talent and preventing unauthorized employment.
An analysis by the Nihon Keizai Shimbun (Nikkei) of data from the Immigration Services Agency of Japan, published on the 14th, found that the number of foreign nationals newly entering Japan after obtaining an Engineer/Specialist in Humanities/International Services status of residence began declining year on year in September last year. The decline has continued this year, with the drop ranging from 20% to 40%.
The Engineer/Specialist in Humanities/International Services status is an employment visa issued to foreign white-collar workers such as IT engineers, interpreters and translators, and overseas sales staff. It can be obtained either upon entering Japan or by changing from a student visa or another status of residence. At the end of last year, 470,000 people held this status, accounting for about 20% of all foreign workers. It was the largest category among employment-related statuses of residence.
The rapid decline is attributed in part to changes in the hiring market caused by AI. At an IT vocational school in Osaka, only a few of the roughly 40 international students scheduled to graduate next spring had received job offers by early September. In previous years, about 10 students would have secured jobs by that time. An IT company that had hired international students from the school every year told the school it would hire “zero” new employees next year, saying, “We no longer need entry-level workers.”
The impact on the interpretation and translation market has been even greater. Revenue from related services at Bicos, which provides interpretation and translation services for foreign nationals, has fallen to about 30% of its 2023 peak. Introductions and placements of foreign talent, which numbered several dozen annually before the COVID-19 pandemic, have now dwindled to just a few cases.
Experienced workers are not exempt. Even a Chinese job seeker who graduated from a Japanese university, had seven to eight years of engineering experience, and held N1, the highest level of the Japanese-Language Proficiency Test, was rejected in recruitment by a major company.
The Japanese government’s stricter screening is also contributing to the decline in foreign talent. This follows a series of cases involving so-called “sham Engineer/Specialist in Humanities/International Services” arrangements, in which people entered Japan on this visa but performed unskilled labor at factories, restaurants, and lodging facilities. In 2024, it was revealed that about 200 Vietnamese nationals holding this status had been illegally dispatched to manufacturing sites in Aichi Prefecture.
Since March this year, the Japanese government has required staffing agencies that send foreign workers and the companies where they actually work to submit pledges that the workers will not be assigned unskilled labor outside the scope of their status. Since April, proof of Japanese-language proficiency has also been mandatory for jobs such as interpretation and hotel front-desk work that involve serving customers in Japanese.
The problem is that regulations intended to prevent unauthorized employment could also discourage legitimate hiring of foreign workers. Last autumn, an operator of hotels in central Japan was told by immigration authorities that the proportion of foreign employees was excessively high. The company complained that the screening standards were out of touch with workplaces facing labor shortages, saying, “The operation cannot function without foreign employees.”
Attorney Shohei Sugita predicted, “The tougher screening and companies’ reduced hiring could combine as a double blow, causing the number of Engineer/Specialist in Humanities/International Services professionals entering Japan to decline further.” However, some analysts say demand for foreign talent remains solid in areas such as serving visitors to Japan and overseas sales.
Concerns that visa renewals could be denied are also spreading among foreign nationals. As perceptions grow that finding work in Japan has become more difficult, one vocational school has seen attendance at its information sessions fall by half in just one year.
Foreign talent may increasingly turn to other countries instead of Japan. The Nikkei noted, “As competition to attract talent across borders intensifies, Japan must once again clearly articulate a policy direction that welcomes foreign talent if it is to remain a country chosen by people from overseas.”

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