ENGLISH teaching chain NOVA, which employs more Australians and foreigners than any other Japanese company, has admitted it may have to shut hundreds of schools to account for massive financial losses this year.
NOVA has said in a statement that it has not made any decision about the closures, but Japanese media have quoted sources as saying it is planning to axe at least 200, and probably many more, of its 900 schools.
It will reportedly target schools in Tokyo and big cities in the Osaka, Aichi and Hyogo prefectures, where rents are exorbitant.
The Kyodo news service said the number of closures was likely to be far in excess of 200 because many landlords were threatening to evict the company over defaults on rent payments.
The cuts would affect more than 1000 teachers and tens of thousands of students. It is unclear what would happen to them, although the school has reportedly said it would allow students to shift to nearby schools.
It was reported earlier this week that the chain, which has the biggest share of Japan’s billion-dollar English lesson industry, failed to pay up to half of its 5000 foreign teaching staff last Friday.
It was the second time in two months that Nova has paid staff late. The wages finally arrived this week.
“A lot of people are really scared by this,” said a 27-year-old Australian teacher in Tokyo, who asked not to be named.
“We heard about all the late wages, and there have been rumours that NOVA is going under for a while ? but now this. And they never tell us anything. We’re always in the dark.”
Louis Carlet, from Japan’s National Union of General Workers, said, “Usually we’re reluctant to speak to the press, because we don’t want to precipitate NOVA’s bankruptcy, but it’s too late for that. We putting preparations in place.”
NOVA’s financial crisis is partly due to overexpansion, but also because in July the Ministry of Economy, Trade and Industry banned the company, based in Osaka, from signing new students on long-term contracts for six months.
The order was given after a court ruled that Nova lied about its services and cancellation policy when soliciting students.
Nova posted a 2.5 billion yen ($A25 million) loss in operating profits for Japan’s last financial year, which ended in March.