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.