Breaking News Bar
posted: 4/27/2013 8:17 AM

Tech geeks invate Japan as bankers retreat

hello
Success - Article sent! close
  • The Roppongi Hills Mori Tower in Tokyo.

      The Roppongi Hills Mori Tower in Tokyo.
    Bloomberg News

  • Lunch diners in the Roppongi Hills Mori Tower in Tokyo, a spot once favored by bankers but now populated by technology workers.

      Lunch diners in the Roppongi Hills Mori Tower in Tokyo, a spot once favored by bankers but now populated by technology workers.
    Bloomberg News

 
By Bloomberg News

TOKYO -- The champagne used to flow at Heartland, the bar in Tokyo's Roppongi Hills complex that drew bankers from the Japan headquarters of Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. upstairs.

"Every day, there was a party," said Mai Shioya, the 39- year-old manager, who started in May 2008 before the global financial crisis that led to Lehman's bankruptcy.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

Bankers in well-cut suits would come in about 5 p.m., hand bartenders corporate credit cards and let their friends charge drinks to the tab until 2 a.m., said Michio Nakamura, 45, who's been running events and entertainment at Heartland since its opening as part of the famed Roppongi Hills development in 2003. After the financial crisis, many disappeared, cutting revenue by 30 percent, Shioya said.

"Those customers and that age have gone," she said.

The void is being filled by a new group of bar patrons: information-technology workers. While financial firms have cut staff in Japan, technology companies have boosted hiring, and as bankers vacated offices at Roppongi Hills, companies including Google and Lenovo Group moved in. As early as this month, Apple will also make the complex its home in Japan, two people familiar with the plan said in January.

"Hiring demand for IT workers is very high," said Taizo Hattori, a director for information technology at Career Incubation Inc., a Tokyo-based recruiting and consulting company. "Many IT firms have doubled head counts."

Goldman Sachs, one of the original tenants which has been reducing head count and moving jobs elsewhere in Asia, is in talks with its landlord to vacate two of the six floors it occupies in the 54-story Mori Tower, part of the $2.2 billion Roppongi Hills complex developed by Mori Building Co., two people with knowledge of the matter have said.

Lehman's Asian business was bought by Tokyo-based Nomura Holdings, and its Japan operations were transferred to the Otemachi business district in 2010.

U.S. and European banks have been eliminating jobs and transferring staff from Japan to Hong Kong and Singapore to reduce expenses. Goldman Sachs led foreign banks in accelerating job cuts at their Japanese brokerages, according to filings with Japan's Financial Services Agency.

Goldman Sachs's Japanese brokerage unit had 847 employees as of March 31, 2012, down about 30 percent from 1,205 in March 2008, the filings show. Barclays, whose Japan headquarters is also at Roppongi Hills, was another that reduced brokerage staff, according to the filings.

The changes are visible at Heartland, located at the street level of the landmark Mori Tower, said Shioya, the manager. Originally opened to promote Heartland brand beer, brewed by Tokyo-based Kirin Holdings Co., it's one of several bars and restaurants in Roppongi Hills, which also includes upscale shops, a hotel, apartments, a movie theater and an art museum.

"People used to be drinking more," she said. "Some customers opened seven bottles of champagne for their birthdays. Some would ask us to prepare 100 champagne glasses for celebrations, and they were offering them to bar staff and strangers."

With fewer bankers and more patrons from the tech world, the atmosphere has become more laid back, Shioya said.

After business declined following the financial crisis, the bar began showing sporting events on its big-screen display to draw customers. Couches where well-dressed men and miniskirted women once paired up to lounge and drink cocktails were replaced with tables and stools.

"The bankers were often drinking with ladies who came here to meet foreign businessmen, who were looking to marry a wealthy banker and go overseas," Shioya said, adding that now the women who come tend to be office workers looking to practice English.

On a recent Friday evening, male patrons in jeans or cargo pants, unshaven, wearing baseball caps or carrying backpacks were as numerous as men in suits.

"It's changed a lot, especially the clientele," said Felix Beatty, an information-risk-management specialist from Montreal who was celebrating his 36th birthday by drinking Heartland beer instead of champagne.

As their hangout transformed, some of the remaining bankers abandoned it for Rigoletto, a bar and restaurant on the fifth floor, said Beatty, who's been coming to Heartland since 2004.

In April 2009, after overseas financial companies cut about 4,300 jobs, or 16 percent of their Japan workforce in 15 months, Heartland hosted a "pink-slip party" to help unemployed bankers network and find new jobs.

Initially occupying 1 1/2 floors at Mori Tower, Google's offices now take up the 26th, 28th and 30th floors, as well as most of the 27th. The Mountain View, Calif.-based company declined in an email to disclose its number of employees in the building.

Lenovo, the world's second-largest maker of personal computers, moved its Japan headquarters to Roppongi Hills in April 2010. Google, operator of the world's biggest search engine, relocated from Tokyo's Shibuya district in August the same year.

Other information-technology companies in Mori Tower include Baidu, operator of China's most-popular search engine; Gree, a Japanese social-networking game site operator; and San Francisco-based Salesforce.com, the biggest maker of online customer-management software.

"Roppongi Hills is sort of a tech hub," said Joseph Schmidt, a spokesman for Salesforce.com. The site's central location and gas-operated power generators to keep offices working during earthquake-related power cuts make it "second to none" for business-continuity planning, he said.

For Baidu, proximity to other information-technology companies is valuable, said Kaiser Kuo, a spokesman for the Beijing-based company.

Lenovo, which started out with one floor at Mori Tower, has since expanded to a second, said Angela Lee, a spokeswoman for the Beijing-based company, which now has about 300 employees.

"Having our main office in Roppongi Hills has brought a positive impact on employees' motivation and recruiting," Lee said.

Apple, based in Cupertino, Calif., will move to Roppongi Hills from Tokyo's Shinjuku district as early as this month and will occupy one or two floors, the people familiar with the plan said. Apple didn't respond to requests for comment.

"IT firms are attracted because of the business environment," Tomohiro Akita, a spokesman for Mori Building, said of Mori Tower, citing the in-house power generators, hotel and conference space.

Demand for information-technology staff is outpacing supply and has been accelerating since early this year, Career Incubation's Hattori said.

"Internet-service companies that target consumers are making money and are cash-rich," he said. "They can afford to invest in human resources and are especially interested in people who can develop business overseas."

Rents for prime office space in Tokyo have fallen more than 40 percent from a peak in the first quarter of 2008, according to property broker Jones Lang LaSalle Inc., prompting more companies to relocate as they seek to upgrade office space.

Rental value in the Akasaka and Roppongi areas in the fourth quarter of 2012 was 57 percent of the 2008 peak, according to Jones Lang. That's attracted new tenants, cutting the vacancy rate in the area to 2.7 percent as of September from 3.3 percent the preceding quarter, data from Jones Lang show.

"Geeks have increased around the area," said Hattori of Career Incubation. "Even some manager-level people who earn a lot of money wear jeans and athletic shoes. Probably they don't have to care about their clothes as they are just happy as long as they can produce something interesting."

After years of declines, hiring by financial firms in Japan is showing some signs of recovery as Prime Minister Shinzo Abe leads efforts to end deflation that have weakened the yen, helping the nation's stock market surge to the highest levels since 2008.

Nomura and Daiwa Securities Group Inc., Japan's two largest brokerages, hired the most university graduates this year since 2009 to strengthen retail operations.

Hiring at financial-services firms through three of Japan's biggest recruiting agencies in the six months ended Sept. 30 rose 7.5 percent from a year earlier to 830 people, the Japan Executive Search and Recruitment Association said in a report in November. That was still dwarfed by information-technology and communications companies, where hiring jumped 23 percent to 3,093.

"We notice a rebound in hiring day by day, helped by Abe's policies," said Katsunobu Komizo, president at Executive Search Partners Co., Japan's biggest recruitment firm focusing on banks. "But it's too soon to tell if this trend will last. I don't see things going back to where they were in 2008, when bankers drank expensive whiskey at clubs in Ginza."

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.