Pasona Group - Company History

Pasona began in February 1976, when Yasuyuki Nambu, fresh out of Kansai University, set up the forerunner of Temporary Center — later Pasona — in Osaka. In the Japan of the day a woman who had left work to marry or raise children had almost no route back into an office job. What Nambu first put on the market was a scheme that dispatched housekeeping and clerical work in half-day units, taking a fee from the client firm and paying registrants by the hour. But supplying other people’s labour as a business was, in principle, forbidden under the Employment Security Act, so Temporary Center dressed the arrangement as a housekeeping-service contract and made its business live in the gap between the law and the demand for it.

The demand was real on both sides — firms that would rather absorb the peaks and troughs of clerical work with outside hands than with permanent hires, and women looking for a way back to work — and through the late 1970s the register of homemakers and students grew. The turn from a contracting trade into a licensed industry came in 1986, when the Worker Dispatch Law, passed the year before, took effect: Temporary Center was authorised at once and switched from housekeeping contracts to dispatch-based office staffing. The law was strict — dispatch was confined to thirteen job categories — so the company built its base on secretarial, filing and financial work and pushed hard into Tokyo, passing 100,000 registered staff by 1987.

In 1993 the company renamed itself Pasona — from “Personal And Social Network Association” — and rode the deregulation that followed, as the permitted categories widened to sixteen in 1995 and twenty-six in 1996, then opened almost fully in 1999. Pasona grew into one of the industry’s big three alongside Recruit and Temp Staff (today’s Persol). The thin economics beneath the boom kept showing through, though: an audit found many dispatch firms under-paying social insurance, and even the largest earned ordinary-profit margins of only one or two per cent. Late in the decade Nambu began layering placement and outplacement onto dispatch — founding Pasona Career in 1998 — sketching the three-tier human-services group the later holding company would formalise.

Even as the core dispatch business thrived, the ventures Nambu had spun up through the 1990s — parallel-import cosmetics, the Kobe Harbor Circus retail complex opened after the 1995 earthquake — bled the parent’s profits, and every bonus season brought fresh rumours about Pasona’s cash flow. In June 2000 the company took a drastic step: it moved the core staffing business into a subsidiary and renamed that subsidiary Pasona, while the original Pasona was turned into Nambu’s personal asset-holding vehicle, Nambu Enterprise. The subsidiary now carried the business and would become the entity that listed; the founding company retreated to managing assets. Governance was recast at the same time — nine directors cut to five under an executive-officer system, Nambu stepping back from the presidency to a group-representative role, and Muneo Ueda promoted to president.

Behind the rescue stood two outsiders. Hayao Nakayama, who had crossed from Sega to become Pasona’s chairman in 1999, leaned on Sega’s banks to restart lending that had all but frozen; and Masayoshi Son of SoftBank, a fellow entrepreneur close to Nambu, moved his own bank — Fuji Bank — which drew up the very plan that split the business off. With the balance sheet stabilised, Pasona listed on the Osaka Nasdaq Japan market in December 2001, raising about $139.9M (¥17bn), and in October 2003 dual-listed on the First Section of the Tokyo Stock Exchange — the first staffing company to reach the main board.

Pasona then turned serial listings into a strategy. In 2004 the subsidiaries Pasona Tech and Benefit One, a welfare-benefits outsourcer, went public on JASDAQ; Benefit One climbed to the TSE and grew into the country’s number-two in its market. Floating subsidiaries funnelled independent capital into each business and lifted the group’s combined market value, while Nambu kept his controlling stakes. In December 2007 a share transfer created the pure holding company Pasona Group, listed on the TSE, with the operating Pasona and the listed subsidiaries beneath it — the structure the company still carries.

From 2009 the holding company went on an acquisition spree, taking in two to five subsidiaries a year — dispatch, BPO and contact-centre firms carved out of trading houses, banks and manufacturers: Mitsui & Co.’s human-resource arm in 2009, AIG’s staffing unit in 2010, Ricoh’s in 2011, then Caplan, Yaskawa Business Staff and Bewith in 2012, Panasonic Business Service in 2015, NTT’s human-solutions business in 2017. Each was a captive carve-out, bought together with its registered staff and its client base.

The spree roughly doubled the group. Consolidated sales grew from about $2.3B (¥182bn) to $3.0B (¥327bn), and operating profit rose several-fold — yet the operating margin crept only from about one to three per cent, far below Recruit’s seven and Persol’s four. The reason sat inside the deals: the acquired firms mostly served their former parents on captive contracts, leaving little room to cross-sell or cut costs. Nambu kept describing the plan as building a “department store” of human services; the market kept pointing out that scale had arrived without profitability.

In 2017 the Hong Kong activist Oasis Management took a stake and opened a public campaign, “A Better Pasona,” pressing the group to unwind its listed subsidiaries — Benefit One above all — return more cash, and strengthen its independent directors. The logic was stark: Benefit One’s market value had come to exceed the parent’s own, so the market was, in effect, valuing standalone Pasona at less than nothing. At the 2018 annual meeting Oasis’s shareholder proposals were voted down and Nambu’s rule held, but Benefit One’s market capitalisation went on trading at three to five times the parent’s, and the question the fund had raised did not go away.

In September 2020 Nambu announced that Pasona would move its main head-office functions — personnel, accounting, PR, planning, some 1,200 of about 1,800 staff — from central Tokyo to Awaji Island in Hyogo over four years, a “dispersed, dual-track” way of working that the pandemic had made plausible. Awaji already held a cluster of the group’s tourism and agriculture ventures. But the move ran behind its plan: some employees balked at leaving families in Tokyo and the deadline slipped, while the regional-revitalisation and tourism segment posted an operating loss every year and never rose above a couple of per cent of group sales.

The decisive turn came from the subsidiary Nambu had refused to sell. In November 2023 Dai-ichi Life launched a takeover bid for Benefit One, valuing it at roughly $2.0B (¥280bn); an M3 counter-bid pushed the price up before M3 withdrew, and Dai-ichi prevailed in April 2024. In May 2024 Pasona handed over its entire Benefit One stake and booked a special gain of about $792.1M (¥120bn), lifting net profit sixteen-fold for the year. The “unwinding of listed subsidiaries” that Oasis had demanded in 2017, and Nambu had rejected, was now executed by the founder himself — six years late and in the same direction — and Pasona returned cash through a $211.2M (¥32bn) buyback and a higher payout.

But losing its largest earner and its biggest source of market value left the parent exposed. In the year to May 2025 consolidated sales fell to about $2.1B (¥309bn) and Pasona posted its first consolidated operating loss since listing; that same summer Oasis returned, re-disclosing a 5.02% stake for “important proposals.” Leadership was refreshed alongside the sale: Hirotaka Wakamoto, a former banker who had joined Pasona in 2012, became president and CEO in May 2024 — the first banker in the top job since the holding company was formed — signalling a turn toward financial discipline. Yet Nambu stayed on above him as group representative and president, so the company now balances three unresolved questions at once: how to rebuild the core, whether tourism and agriculture can ever pay, and when the founder’s long personal rule will pass to the next generation.