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Nintendo boss rules out layoffs as bad for staff morale

Staff cuts not a long-term solution to financial issues, argues Satoru Iwata

Introducing staffs during times of difficulty is not a healthy long-term practice and damages employee moral, says Nintendo president Satoru Iwata.

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"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," said Iwata during a recent investor Q&A. "I believe we should continue working toward this ideal."

But he goes on to argue against the practice of cutting staff for short-term gains. "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," said Iwata.

"I believe we can become profitable with the current business structure in consideration of exchange rate trends and popularization of our platforms in the future. 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."

Wii U has suffered a slow start to life, blamed largely on the lack of compelling titles. But Iwata maintains that the firm will not release games before they're ready, emphasizing that quality is paramount in the long run.

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