Layoffs have a massive impact on job security world-wide, and the video game industry is not immune. In fact, countless layoffs in gaming have been sounding off like cascading dominoes in 2023 and spilling over to 2024. However, a former CEO’s stance on layoffs has recirculated, and quite frankly, should put other big wigs in the industry to shame.
Satoru Iwata was CEO of Nintendo from 2002 until his untimely passing in 2015. He was well-known for pushing the company to be innovative, which aligns with the consoles that released during his time: the Wii, Nintendo DS, and the WiiU.
Image Credit: Polygon
Like with any CEO, he faced many challenges during his tenure at the Nintendo. His role consisted far less of rainbows and unicorns as the WiiU proved to be a commercial failure, and as leadership, he was responsible to trouble-shooting financial dips. While most companies turn to layoffs to stabilize the bottom line, he chose another strategy.
We should of course cut unnecessary costs and pursue efficient business operations. 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.
-Satoru Iwata
Before I we continue further, I wanted to pause and reflect on just a few examples of major layoffs within the last year in the video game industry:
- Singularity Six: 10% of their employees
- Embracer Group: over 1,000 employees in the 2nd half of 2023
- Epic: over 800 employees
- Microsoft: Approximately 1,900 employees in the gaming division
- Bungie: Approximately 100 employees
- Unity: Approximately 600 employees
- Riot Games: Approximately 10% of employees
- Digital Extremes: over 30 employees
*Note: Not listed in any particular order and selection was meant to be a small sampling
While layoffs aren’t new, unofficial trackers cite approximately 1,000 layoffs in the gaming industry in 2022 versus over 7,000 in 2023. Many companies cite the pandemic as a major factor in the necessary evil of layoffs. There was a surge in interest for video games while people were shut in, there was a hiring spree, and now the financial landscape has shifted as the world returns to the “new normal.”
However, are layoffs always the answer?
This is where we turn back to Satoru Iwata, who shared his philosophy to shareholders over ten years ago in 2013. He believed in a long-term solution, and layoffs weren’t it.
“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.”
-Satoru Iwata
That year, instead of laying off Nintendo employees, Iwata reduced his salary by 50% for five months in the wake of the poor financial performance from the WiiU. Other Nintendo executives also partook in a 20-30% pay cut. Note that Iwata’s net worth was approximately $100 million. For comparison, Epic’s CEO Tim Sweeny’s real time net worth as of this writing is $4.1 BILLION, and Embracer Group’s CEO Lars Wingefors’ net worth as of this writing is $1.1 BILLION.
Image Credit: Mirador Economico
In addition to executive pay cuts, we learned that Nintendo always keeps some money in a reserve. These practices are nearly unheard of in the West, and Iwata’s name has been popping up as of late amidst these massive layoffs. Perhaps it is a staunch reminder that layoffs aren’t always the answer, or at least, not the entire answer.
I hope the spirit of Satoru Iwata’s practice continues at Nintendo and also positively influences other employers in the video game industry across the world. While layoffs may be unavoidable to some, especially smaller companies who are left with no other option, larger ones may should take a page from Iwata’s book.
What are your thoughts on Iwata’s philosophy on company layoffs? Could this be a beacon of hope for change in the future? Please share your thoughts with us on our Boss Rush Facebook Group or our Boss Rush Discord.
The Boss Rush Podcast: The Flagship Podcast of Boss Rush Media and the Boss Rush Network
The Boss Rush Podcast – The Boss Rush Podcast is the flagship podcast of Boss Rush Media and the Boss Rush Network. Each week, Corey, Stephanie, LeRon, and their friends from around the internet come together with other creators, developers, and industry veterans to talk about games they’ve been playing, discuss video game and entertainment based topics, and answer questions solicited on social media and the community Discord.
New episodes of the Boss Rush Podcast release every Monday morning on YouTube and all major podcast applications like Apple Podcasts and Spotify. Patreon supporters gain one week early access.
Listen on your favorite podcast application or watch on YouTube!
Anchor | Apple Podcasts | Spotify | Google | Twitch | Overcast | Pocket Casts | Stitcher | Amazon Music
Follow The Boss Rush Podcast on Social Media:
Twitter | Discord | Instagram | Twitch | YouTube | Facebook Group | Facebook
Sources: CNBC-1, CNBC-2, GameRant, Game Developer, Polygon-1, Polygon-2, The Verge, Wired, NME, NCESC, Hollywood Reporter, MSN, Forbes
Featured Image Source: The Next Web
Leave a Reply