Iwata Refuses To Lay Off Employees

iwata

This weekend’s discussion got a little heated at times,however, good or bad, I found a lot of passion for Nintendo.  Regardless of what side of the fence you are on, everyone that commented seems to want to see Nintendo prosper.  I find it amazing that, even in down times, Nintendo fans stand tall and come together and can have a civil debate rather than a flame war.  Regardless if you like the game-pad (apparently Microsoft and Sony do since they will be including the same features in their next gen consoles – albeit in a more expensive way), want more power (I still stand behind that quality games override power any day), more games (They are coming, patience young grasshopper), or more third party support (It is there, however we tend to only hear the news about the lack of support), or more sales (I am optimistic that we will see the increase we want by the end of the year), in the end, we all know that Nintendo has hit a rough patch, but they will prevail.

Despite slow sales and bad press, Nintendo does not seem to be worried about the negativity that has found its way into their company.  In fact, they are taking this time to reassure employees that their jobs are safe.  This is a strategy we just do not see these days.  Iwata feels that laying people off will force those that stay to walk on eggshells, and that could affect their work.

“If we reduce the number of employees for better short-term financial results, 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.”

Sure, layoffs would solve a short term problem, but the results could become long term.  It is no secret that Nintendo has an emergency stash of cash, so even though they have reported losses, they are still in a good cash position internally.  With the announcement that there will not be layoffs, they are also in a good position mentally.  Regardless of how you feel about Nintendo and the Wii U situation, you have to respect Iwata, and his team, for thinking of the employees instead of handing out pink slips.

The lack of layoffs shows me that Nintendo has confidence in their company and the Wii U.  I don’t think Nintendo expected to see such slow sales this early in the Wii U life cycle, but I think that they do see a sales increase in the near future.  Those of you that are on the edge about the Wii U’s future, don’t leave just yet… I think the best is yet to come.  Will the Wii U be as popular as the Wii?  I am not sure if any of the future consoles form any of the big three will match those figures, but I have a feeling that the Wii will remain relevant and become very profitable for Nintendo.

 

5 Responses to Iwata Refuses To Lay Off Employees

  1. Breyfunk says:

    Most companies would have started letting their employees go at this point, props to the Big N for remaining a stable employer in rough economic times. I wish more companies (like the one I work at) would take this approach to getting out of a poor sales slump.

  2. Lou says:

    The concern here is that Nintendo didn’t just release this statement, it was in response to a question at the shareholder meeting. The question centered on the fact that Nintendo has suffered losses in the past two fiscal years, so why haven’t they done a corporate restructuring to improve the bottom line. The question really is – you’re losing money, so where are the layoffs?

    Whether you agree with that approach or not is irrelevant. All that matter is what the shareholders think, and you can tell form this question they are tired of the losses. Cash reserves are nice, but don’t really matter in terms of cash flow.

    This is why I think Iwata will eventually be forced out. Even if the Wii U starts to sell more in 6 months, it will still be seen by investors as a failure because they want that cash on the books now, not later. Cash now is always more valuable than future cash.

    Yes, we’re here because we like Nintendo products, and yes the company will survive… but how will it look? What if there were no hardware? What if they were forced to sell an IP? What if Iwata and Miyamoto are forced out? All of these things are possibilities.

    The Wii U simply isn’t going to explode into a successful console. There is going to be fallout.

  3. thedude says:

    Layoffs are only knee-jerk reactions to low funds, in the long run, it just hurts the company. First, when they get their budget back up, they will have to re-hire, and Second, as Mr. Iwata said, it hurts employee moral, which makes them work less hard, which hurts the company even more.

    I think its great that a company finally realized that layoffs just end up hurting the company in the long run, and i have no doubt that Nintendo will recover from this rough patch

  4. DevinShadowV says:

    Even I was hammering on the WiiU on a blog post before but this is a smart move Iwata is thinking the long run of it since the WiiU is a flop right now and I hope it becomes the next gamecube. Now before you say it GC was a good console that had great games it just came dead last so I’m hoping this will do the same so it can survive so Iwata good luck with your choice and future of the company.

  5. Mattiac says:

    Iwata-san did the honorable and right thing! I would’ve done exactly the same if I were in his shoes! The biggest telephone network operator here in Sweden = Telia (mostly owned by our stupid government) used lay off even though they had a record profit! 🙁 Talk about bastards! My friend use to work there and told me, but he didn’t loose his job because of the lay off.

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