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Someone asked Nintendo President Satoru Iwata to lay off workers, and his response was awesome

Casey Baseel Nov 28, 2020
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Late video game boss said the words every employee wants to hear.

Nintendo’s Satoru Iwata was a unique presence in the video game world. Most of the famous figures in the industry are designers, directors, artists, and musicians, but Iwata is best loved not for his direct involvement with any particular game, but for his stewardship of Nintendo as a whole during his tenure as the company’s president, which lasted from 2002 until his death in 2015.

Admirable business decisions may seem like an odd way to earn fans in a community where the end goal is, above all else, having fun, but an anecdote from a Nintendo stockholder conference provides a crystal-clear example of why Iwata remains so loved and respected, even five years after his untimely passing.

First, a bit of history. In the early 2010s, Nintendo was taking a beating financially. Starting in 2010, sales were dropping year after year, and the ordinarily profitable company suffered operating losses in 2012, following the lackluster launch of the Wii U. All of these were on investors’ minds during the shareholder meeting that took place in June of 2013, as was, no doubt, the looming threat of rival Sony’s PlayStation 4, which was scheduled for release later that year.

▼ “I’m coming for you, Nintendo!”

During the meeting, someone brought up the fact that Nintendo’s sales for the year, while down, were about what they had been in 2000. The company had managed to make a respectable profit in 2000, though, so if they were now experiencing losses, isn’t that a sign that their costs were too high? Iwata was even directly asked:

“Don’t you think it would be best for us to have a round of layoffs?”

“If I’m understanding your question, you’re asking why we’re not making a profit now, when in the past we did make one with the same amount of revenue,” Iwata calmly replied. He then proceeded to explain that one major factor was the weakening of foreign currencies, particularly the U.S. dollar and Euro, against the yen that year, meaning that Nintendo’s overseas sales, when converted back into yen, would have been lower than usual even if they had been selling the same amount of games and consoles that year. At the same time, the majority of the company’s development was done in Japan, where salaries, naturally, were paid in yen, resulting in a situation where much of their revenue was in depressed currencies while their expenses stayed the same.

But that’s all the more reason for Nintendo to lay off some of its Japanese staff, right? Nope, because as Iwata told the stockholder who’d asked about firing people:

“If the people working in our company are afraid of losing their jobs, they won’t be able to make games that will move gamers’ hearts.”

That’s not to say Iwata wanted workers to not feel any drive to create good products. But he firmly believed that layoffs would crush employee morale, and the more your mind is focused on the question of “Am I going to have a job tomorrow?” the harder it is to come up with answers to “What would be a cool power for Mario in his next game?”

Iwata continued:

“Obviously, we need to reduce needless expenses and search for more efficient ways of working, and there are cases of companies out there who say ‘We’re going to get back to profitability by firing a lot of people.’ But at Nintendo, it is the individual contributions of each worker in each division that makes our company what it is. I do not believe that cutting out a part of ourselves, saying ‘The company is in a tough spot, so we’d like you to leave,’ is a way to achieve a long-term strengthening of the company.

My intention is for us to reduce unnecessary expenses, operate more efficiently, and create revenue that exceeds those costs.

Thank you for your question.”

Nintendo’s turnaround wasn’t quick or easy, as the company’s operating losses continued throughout 2013 and 2014. However, in 2015, it was back to making a profit, and it’s now arguably in the best shape financially that it’s ever been in, vindicating Iwata’s attitude and adding to his legacy as a class act up until the very end.

Source: Nintendo via Twitter/@hirosan_3 via Hachima Kiko
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