We hear it all too often in the gaming industry; people getting fired and whole teams being let go because shareholders just aren’t able to put enough gold-crusted caviar on their end-of-the-month Salticrax. Nintendo’s shareholder’s aren’t the happiest at the moment, wit the Wii U’s poor sales – and they’ve asked Nintendo President why he hasn’t done any sort of corporate restructuring (read: lay-offs) despite the company incurring losses for the last two periods.
Iwata doesn’t think that’s the sort of corporate cost cutting that will have any long-term benefits – and will only lead to lower morale and a loss of valuable skills; a refreshing stance to see in an industry where people are treated as little more than trained, easily replaceable monkeys.
“The manpower required for increasingly complex and advanced product development has totally changed from that of the past. Hence, the number of employees has increased and higher costs have been incurred,” he said.
“Regarding why we have not reduced the number of the personnel, it is true that our business has its ups and downs every few years, and of course, our ideal situation is to make a profit even in the low periods, return these profits to investors and maintain a high share price. I believe we should continue working toward this ideal.
If we reduce the number of employees for better short-term financial results, however, employee morale will decrease, and I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world.”
Iwata believes that Nintendo can return to profitability with its current business structure – but will implement cost-cutting measures if necessary, by culling unnecessary expenses…that aren’t staff.
“I know that some employers publicize their restructuring plan to improve their financial performance by letting a number of their employees go, but at Nintendo, employees make valuable contributions in their respective fields, so I believe that laying off a group of employees will not help to strengthen Nintendo’s business in the long run,” he said.
“Our current policy is to achieve favorable results by continuously cutting unnecessary expenses and increasing business efficiency.”