Mario Nintendo
Mayukh Saha
Mayukh Saha
March 11, 2024 ·  3 min read

Nintendo’s CEO Cut His Salary in Half to Prevent Layoffs, and It’s an Example of True Leadership

If you want to make a place where teams can do well, having a great boss is very important. People become part of the company when they work for a good boss, and they see the success of the business as their own. This is what Satoru Iwata did with his one step, which saved Nintendo from going out of business. 

CNBC reported that his selfless decision to cut in half his own pay to keep the company from laying off workers after a bad product launch showed that he trusted his workers. They didn’t let him down by coming back with some of the most successful projects the company has ever seen. People are once again talking about Iwata’s step because of what’s going on in the USA. They want to know why the executives of a company can’t lower their pay to help the team keep their jobs.

The Iwata Compromise: Can Lowering CEO Salaries Help the Economy?

It’s very hard for the middle class in the US right now because the economy is in such bad shape. They are going to have to fire a lot of people. Forbes said that 305,000 workers were let go in 2023, and more were on the way. Due to this, there has been a lot of talk on social media about the high salaries CEOs get and how lowering these wages might help the situation. A lot of people are looking to Iwata as an example and how well it worked for the company.

He was CEO of Nintendo, a video game company based in Japan, from 2002 until his death in 2015. In 2013, they came out with the Wii U system, which was the follow-up to their Wii console. People thought that the system would break sales records and make the company as much money as its predecessor did. In reality, though, it was so disliked that it cost the company a lot of money. The harm was so great that the board started to think about letting people go in order to get the money back.

The Game Developer said that Iwata had to talk to the board directly and stress that he would not let anyone lose their job. He said, “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.” As a compromise, Iwata suggested that he should get half of his pay to protect the jobs of his team. He was a real leader who took the blame for mistakes as well as the good things that happened.

Satoru Iwata: Betting on People, Not Layoffs, Leads to Unexpected Success For Nintendo

If we reduce the number of employees for better short-term financial results, 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 about layoffs. It was great for the company that they thought of this. They worked harder for the company after seeing how much trust their boss had in them. 

Soon, Switch came out and changed the game world forever. The business sold 139 million Switches around the world by 2023. Poor Iwata, he wasn’t there to see that success for himself. The fact that such idealistic steps led to huge profits is a great example for executives to use to deal with the present situation. CEOs all over the world could learn from this example of how to be a good leader in these tough times.

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