Forced to close furnaces, the company exhibited a typical Japanese economic aversion to layoffs, opting instead to offer standard early retirement enticements but also less conventional schemes such as a mushroom cultivation venture that used the surplus heat created by steel furnaces to temperature control a fecund fungi complex.

During this time, the entire Japanese steel industry struggled in a period of turmoil as other nations such as South Korea, with only a fraction of labor costs, won over business.

The company announced a loss in 1986, prompting a determined effort to diversify away from the moribund "smokestack" industrial sector and to provide new work for thousands of employees that would be transferred from closing furnaces.

During the 1980s and 1990s, Nippon Steel permanently closed blast furnaces at three of its eight primary domestic locations: Kamaishi (1989), Sakai (1990), and Hirohata (1993).

[11][12][13] Nippon Steel expanded or further established itself in semiconductors, electronics, a theme park called Space World, software, and even human resources products.

However, Nippon Steel reported earnings in 1999 suffered from an overwhelming charge needed to cover pension costs, a problem not uncommon for shrinking industrial giants.

[28][29] In March 2024, USW International President David McCall stated that Biden's decision to support keeping U.S. Steel domestically owned and operated "should end the debate.

Nippon Steel Trading committed to the United Steelworkers (USW) union, which had also opposed the deal, to invest an additional $1.4 billion and also guaranteed that, subject to a number of conditions, there would be no layoffs or plant closures until September 2026.

[41][42] The lawsuit was settled in 2015 through an agreement under which the Korean steelmaker paid 30 billion yen (US$300 million at the time) to Nippon Steel.

[44] On October 30, 2018, a lawsuit which was originally filed in 2005 concluded with Nippon being ordered by the South Korea Supreme Court to pay compensation totaling 100 million won ($87,680) each to four surviving Koreans who were victims of forced labor at a steel mill which was supervised by Nippon's predecessor company Japan Iron & Steel Co. during Japan's colonial rule of Korea[45][46][47] The asset seizure ordered by the Korean supreme court involves Nippon's stake in PNR, the POSCO-Nippon joint venture.

[49] The Japanese Minister of Foreign Affairs Taro Kono maintained that the matter "has been resolved following the Treaty on Basic Relations between Japan and the Republic of Korea".

To manage the load they have invested ¥4 billion (about $38.2 million) to install equipment at Oita Mill and set up a second furnace at Kyushu facility.

[55] Nippon Steel reported Total CO2e emissions (Direct + Indirect) for the twelve months ending 31 March 2020 at 73,706 Kt (-16,556 /-18.3% y-o-y).