This study examines whether Japan's long-term employment system has changed by investigating changes in employment adjustment behaviors. Using dynamic panel data for the last two decades, we examine if and how Japanese firms' downsizing avoidance behaviors--even at the expense of profits--have changed. Therefore, we conduct the Arellano and Bond estimation of employment adjustment function and the bivariate probit estimation of determinants of massive employment reduction. Both estimation results suggest that deeply rooted Japanese firms' downsizing avoidance behaviors that protect employment have been maintained for a long time even at the expense of profits, although weakened to some extent.