Executives at EA Japan express concerns over Microsoft's mass layoffs and the pressure from shareholders for 'immediate returns from substantial investments'
In the face of Microsoft's recent announcement of 9,000 layoffs across its gaming division and the cancellation of several major projects, Electronic Arts (EA) Japan's general manager, Shaun Noguchi, has expressed deep concern and regret.
Noguchi's apprehension stems not from personal hypocrisy, as EA Japan operates under different labor laws compared to the wider EA company. Japan's labor laws are notably protective, requiring companies to justify dismissals with valid reasons such as economic necessity or employee misconduct. Arbitrary layoffs are generally prohibited.
In contrast to countries like the US or many in Europe, where employment-at-will or more flexible labor contracts allow more routine layoffs during restructuring, Japanese companies, including EA Japan, typically emphasize reassigning employees internally rather than terminating them. This includes redeploying staff to different roles, departments, or subsidiaries to avoid layoffs.
When layoffs do occur in Japan, companies usually provide substantial severance packages, extended notice periods, and support for job placement, partly to comply with labor regulations and partly to maintain corporate reputation. This is in contrast to some other regions where severance terms can be less generous depending on local laws.
Noguchi warns against throwing away developer talent and years of work to meet shareholder expectations. He believes you cannot keep chasing shareholder approval forever in the gaming industry. This sentiment is echoed by the slow and negotiated processes that restructuring efforts in Japan typically involve, which can delay or moderate layoffs.
In Japan, the term "restructuring" is perceived as "layoffs" and carries significant impact. Foreign-affiliated businesses in Japan are increasingly demanding short-term results from large-scale investments, but the cultural emphasis on lifetime employment influences EA Japan’s restructuring strategies. Companies aim to maintain long-term relationships with employees, which discourages frequent layoffs and encourages gradual adjustments like hiring freezes or voluntary retirement programs.
Randall, a gaming enthusiast with a history dating back to a World of Warcraft subscription at age 12, shares Noguchi's concerns. Randall, who has written for various websites including Techradar, The Escapist, Dicebreaker, The Gamer, Into the Spine, and PC Gamer, is a proponent of various tabletop RPGs and games, often resulting in changes in direction before sufficient time has been invested, potentially leading to the discarding of years of work.
In the worst-case scenario, developers in Japan use "expulsion rooms" to pressure employees into quitting. However, such practices are not representative of the industry as a whole and are not condoned by companies like EA Japan.
In conclusion, EA Japan's approach to layoffs and restructuring differs significantly from practices in other regions, primarily due to Japan's strict labor laws. This cautious, regulated, and employee-protective approach aligns with the broader context where Japanese companies like Panasonic also manage downsizing carefully due to strict local labor norms.
- Shaun Noguchi, the general manager of EA Japan, has expressed concern over Microsoft's gaming division layoffs and project cancellations, but not due to personal hypocrisy, as EA Japan adheres to Japan's strict labor laws.
- Unlike in some countries, where flexible labor contracts allow routine layoffs during restructuring, Japanese companies like EA Japan prioritize internal reassignments to avoid terminations.
- When layoffs do occur in Japan, companies offer substantial severance packages, extended notice periods, and job placement support, complying with labor regulations and maintaining corporate reputation.
- Randall, a gaming enthusiast and writer, shares Noguchi's concerns over the potential squandering of developer talent and years of work, echoing the gradual adjustment strategies employed by EA Japan and other Japanese companies.
