Mon, Jul 08, 2013 | 02:57 BST
Nintendo won’t cut staff to satisfy shareholders in the short term
Nintendo president Satoru Iwata has staunchly refused to let staff go in order to shore up the Japanese company’s teetering financial peformance.
During a Q&A with investors, Iwata was challenged to justify why Nintendo hadn’t undergone “corporate restructuring” – usually a euphemism for lay-offs – in response to operating losses during its two most recent fiscal periods.
Iwata said the losses Nintendo made could be ascribed to multiple causes including fluctuating foreign currency exchange rates, resulting in less return from the same sales figures, but also acknowledged that the company is paying more employees than in previous financial years.
“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 said he believes Nintendo can be profitable with its current business structure, although he said it will indeed enact appropriate certain cost-saving measures.
“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.”