Raises Instead of Layoffs; Nintendo Positively Surprises
Nintendo is not going to follow in the footsteps of other companies and make huge staff cuts. The Japanese company not only does not get rid of employees, but also wants to pay them even more. It has just announced 10 percent salary increases.
Rising inflation and the related slowdown in the economy have led many large corporations to announce workforce reductions. Disney intends to get rid of 7,000 people, and similar staff actions have also been announced by Microsoft and Amazon, Twitter and Meta.
However, there are companies that do not intend to get rid of experienced employees, and as if that were not enough - they are raising their salaries. Among them is Nintendo, whose president Shuntaro Furukawa has just announced of a 10-percent salary increase to make the company more competitive in the demanding Japanese labor market. The CEO believes that securing the workforce is extremely important for the corporation's long-term growth.
Interestingly, Nintendo raises employee salaries despite achieving lower profits. Indeed, in the first three quarters of the current fiscal year, the company recorded a net profit of 346 billion yen ($2.6 billion), and this is 5.8% lower compared to the same period last year. This is mainly due to lower console sales, related to semiconductor shortages and disruptions in supply chains caused by the pandemic.
Nintendo raises salaries for employees
Because of this the company also had to lower its annual profit forecast from 400 billion yen to 370 billion yen ($2.8 billion). In comparison, the profit made in the previous fiscal year was 477.7 billion yen. Meanwhile, Nintendo's product sales in the first three quarters of the current fiscal year totaled 1.3 trillion yen ($10 billion), down 1.9% from the previous year. The company has already adjusted its plans to the current market situation and plans to find buyers for 18 million Switch consoles this year, although earlier forecasts called for sales of 21 million units.
I would also add that the total Switch console sales worldwide have already exceeded 122 million units. Despite increasingly strong competition, the device is still holding up well, mainly thanks to excellent exclusive games. However, the Switch is almost six years old now and stands apart from its rivals in terms of capabilities, offering a much lower image resolution, so a successor would certainly come in handy. Unfortunately, for now we can't count on it. Although the company at one time reportedly worked on a more powerful Switch, it recently announced that this device will never be built. So fans of the brand must make do with the current model for now.
