Nintendo chief operating officer Satoru Iwata is not considering layoff an option to reduce their operating costs but would focus more on encouraging third-party to support the gaming company.
News about the company plans of doing corporate restructuring came out as early as first quarter of the year. The company had reported operating losses for two years now but Iwata confirmed that cutting its manpower is not an option for now. The board decided to reorganize the existing divisions they have to form a new division called Integrated Research & Development Division which will be headed by senior managing director Genyo Takeda.
Nintendo reported that the company wasn’t able to meet its projected sales for the Wii U during the fiscal year. It sold only 3.06 million units which ade them trim the goal to 4 million instead of 5.5 million and is still pushing its effort to draw more buyers. It is also uncertain that Mario Kart 8 and Super Smash Brothers can stand a chance against next-gen console devices from Microsoft and Sony.
Iwata attributed the operating losses of the company from the exchange rate between the Japanese yen and U.S dollar which is now at a rate of 0.0099 cents per 1 Japanese Yen. It has been declining since start of the year. He explained during the 73rd Annual General Meeting of Shareholders how the value of the yen against the dollar could directly affect the company’s financial outcomes.
Despite the losses, Nintendo is still planning to hire more people instead of cutting it since they will need more people to work with them on their more comprehensive product developments. The company acknowledged the idea that cutting their manpower may save those costs but they look at it as a short term resolution which is not considered 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.
So what is the best solution Nintendo had? "Our current policy is to achieve favorable results by continuously cutting unnecessary expenses and increasing business efficiency," Iwata explained. A perfect example of this is them shutting down the development of the shutting down the development of Wii Vitality Sensor.
