The recent economy has seen a trend of doing more with less - increasing individual productivity while trimming one's overall workforce. Nintendo CEO and President Satoru Iwata, however, is not expressing interest in going down this path as a business, believing its short-term gains would have negative long-term effects.
A participant of Nintendo’s 73rd Annual General Meeting of Shareholders asked Iwata whether the company should have carried out corporate restructuring to offset its past two fiscal years of operating losses. Iwata responded saying that more advanced and complicated products have required a larger workforce and higher costs, but to cut people in these departments could hurt the company's overall development:
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.
According to Iwata, Nintendo should focus on higher efficiency and cutting unnecessary expenditures, but not at the cost of talent or for the short-term appearance of financial gain:
I also 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.
Iwata’s employee-centric focus makes sense considering his roots as a programmer, but whether his views will find favor with investors, who have already given him the lowest approval rating of executives at Nintendo, remains to be seen.
What do you think? Will a long-term outlook benefit Nintendo more in the future, or does it need to make moves now to remain corporately competitive? Let us know by leaving a comment.
[source nintendo.co.jp]
Comments 38
I wish more large corporations considered company morale as valuable to their products!
Mr. Iwata is a very long-term thinker. He doesn't really focus on right now, which is something of a weakness, but he definitely has a broad vision for the future of Nintendo. I think more people need to be like this.
A very smart man that Iwata. If developments are already going slower then anticipated then minimizing the work force would be utterly detrimental, so in the long run he is making the right choice.
My head would explode if Nintendo fired Miyamoto
So basically; screw the people who lowered my approval rating, I'm not going to betray my employees to raise myself in their eyes.
Good guy, that Iwata. Not the best businessman in terms of quick profit, SOMETIMES, but most definitely a trustworthy and praise-worthy human being.
At least he cares about his workers
I'm very impressed with Iwata over this. Once you start getting rid of staff, companies just don't function properly and find it very hard to recover from. Don't listen to anyone who wants a short-term profit. Without enough staff, before long there won't be a company for anyone to make any money at all from.
@Yanchamaru
Nintendo itself would explode if they fired Miyamoto.
Good contributions here & I generally agree with the sentiment that he is a good boss from a videogame employee's perspective. I think it makes him unique in the North American game industry.
The productivity paradox is what these companies are trying to reach, cut on the people and increase productivity but morale can indeed lower, so Iwata is really focused on personnel and business. I like his strategy !
Very good of him. While Nintendo is on a bit of a downer for now, it'll soon be on an winning streak again. Laying staff off right now may save a bit of money but the games would suffer. Nice to see he's also thinking of gamers too.
If some games take 2+ years to make, firing people before said products can me made and shipped is just stupid. You tell them Iwata.
Well it's good to hear he's looking at this from the long term point of view rather than a short term slight of hand.
God bless this man, really. I wish him the best and I will keep supporting Nintendo the only way I know: buying their games!
[applause]
This is why every company should be run by people who were once simple employees themselves. Iwata and Miyamoto, who make most of the decisions in the company, are both developers themselves who started at much lower positions in the company and know the effects of stupid executive decisions.
+100 respect points.
Well with the increased man hours of HD development getting too much overtime should be more the issue not lay-offs lol
Thumbs up for Iwata
thats good that people get to keep there jobs
Why the hell would anyone want Iwata to lay people off? Between making 3DS games, Wii U games, lining the VCs, improving Nintendo Network, and more, they need every hand they can get!
As somebody who lost a lot of friends to one of these types of 'restructurings,' Good.
Iwata just gets it.
@Yanchamaru #4
I think their heads would too, presumably because they would have literally no idea as to why they would do it.
Iwata is an old Japanese guy, Japanese companies historically don't do layoffs. Possibly the reason their economy has been stuck in neutral since 1990 but that's the way it's been in Japan.
Here's a baseless at best blog about it, sorry I don't feel like looking further.
http://japanesecultureandlanguage.blogspot.com/2009/01/japanese-companies-and-layoffs.html
Here's a newspaper article from 1987 so the young'uns can feel like historians.
http://news.google.com/newspapers?nid=1350&dat=19870212&id=-hJPAAAAIBAJ&sjid=4AIEAAAAIBAJ&pg=7047,3894785
Wow, just compare this guy to the EA bosses who act like a bunch of wall street bankers, what a difference.
@Strongo9 I agree.
Iwata:
1. Head of company when the Wii was introduced which flew off of shelves.
2. Took 50% paycut during time when 3DS was struggling
3. Stands against layoffs that would increase near term profits because he has better long term vision
And people on this site have still said he needs to be fired (under different article). smh
Good
This is the kind of stuff that has made me such a Nintendo fanboy. Nintendo has always impressed me with their financial resolve (such as having money put away in case they have a struggling year or... how many could they survive, like 10 years or more?). It's such good business practice.
This is exactly why Pachter doesn't like Nintendo.
@Tryken #31
They have ten billion dollars in the bank, meaning they could take a yearly loss of 250 million dollars and stay in business for 40 years.
Love it.
That's awesome! If only more American companies would follow that lead. Short-term profits are not indicative of long-term success.
Hear that EA?
That's great.
Hallelujah! Finally, a CEO in this god-forsaken global economy that gets it!
This is why I love Nintendo
It is remarkable that after listening to Mark Cern for Playstation give his bio how similar a path Nintendo is going down with the HD jump. Iwata is wise to hold onto his employees. Hopefully, there are some already working to remedy the development time issues such as the way Sony did with x86 processing for PS4. I still want a Sony/Nintendo love child! They have so much they could contribute to one another to build better machines and gaming experiences.
This is one of the reasons why I love Iwata as a CEO. The way he stares into everyone's displeased faces and puts them down in a very simple, stern (yet kind) way is very inspiring. The way he says he refuses to layoff workers, the way he told off the idiot who reminded him he would resign if the Wii U continued to have sluggish sales by saying, "I don't recall saying I'd resign," the way he imposed a 50% pay-cut ON HIMSELF when the 3DS was struggling so that his staff can keep getting paid the same amount. THIS is what a good leader does. We need more leaders like this, a leader that takes sacrifices and stands in the face of hate and cares about his staff and his gamers. This is what a good leader is.
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