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While layoffs are detrimental to employee morale (e.g. employees take less long-term risk), I wonder how much worse the effects of layoffs are in the creative i
by coolandsmartrr 3y ago
While layoffs are detrimental to employee morale (e.g. employees take less long-term risk), I wonder how much worse the effects of layoffs are in the creative industry.
You might be able to replace employees in a more utility-driven company. But creative people are not exactly interchangeable, as creative ideas tend to bounce better among employees who have "chemistry." These collective of creatives end up sharing tribal knowledge of producing creative outputs with a given expectation or taste. If you fire them, it will be difficult to replicate or enhance the creativity (by whatever metric we can try to measure it with).
Japanese film director Akira Kurosawa once lamented the dissolution of the studio system, which turned the industry into a loose gathering on freelancers. He believed it would be antithetical to creativity, which he sees to happen tribally.
A famous counter-example to layoffs in the creative industry is Nintendo. Former CEO Satoru Iwata opposed layoffs as a way to weather financial downturns, as layoffs would discourage employees from committing to their work in the long-term. Instead, Nintendo tries to guarantee stable employment with their sizable financial reserves, albeit not paying a high salary.
Animation studios were able to garner a sense of "expectation" and establish a brand (e.g. Pixar especially with their first 11 features) because of the "regulars" who worked on their releases. Layoffs would change the collaborative chemistry among employees, and can make it difficult to establish or maintain a brand.
- throwaway2037 3y agoThe Nintendo model would never work in the Silicon Valley. Literally, some of the most talented video game programmers that the world has ever known worked most of their career for relative peanuts... compared to what Activision & Co. would have paid them. Much less stable? Yep. From a purely financial perspective, Nintendo is not well run. An infamous quote: <<Nintendo has such a large cash reserve it could lose $250 million every year and wouldn't go bankrupt until 2052.>> Or: <<Nintendo cash on hand for the quarter ending September 30, 2023 was $14.250B.>> There is a limit to useful cash reserves. Else, it should be distributed as a cash dividend, share buyback, or buy a competitor / "invest". In Japanese corporate thinking from 1950s to 1990s, lifetime employment was the singular goal for your employees, above all else. Read that twice and let that sink in. Layoffs were viewed as culturally impossible due to loss of face. It is nearly impossible to (culturally) "translate" this goal into the American state of mind. Simply stated: US employees take much more career risk and, correspondingly, are paid much more. I am not making a moral judgement here about either system -- there are pros and cons for both. My point: Little insight can be found here when comparing the layoff practices of uber-uber-uber-uber-uber-uber-uber-conservative Japanese corps vis-a-vis American tech companies. It is literally Mars vs Venus or Moon vs Earth -- a different planet (culture state of mind). I work in Japan, but I am not Japanese. One of the biggest complaints from foreign software developers is that salaries are awful compared to their home countries. The complaining never stops about it. However, they overlook the full picture -- as noted above. From what I hear, Germany is quite similar -- much lower salaries, but way more stable (fewer layoffs) compared to SV.
- Solvency 3y agoOk so Japanese game developers work for peanuts on the most beloved IP in the world... with stable lifelong careers. Are they happy? Miserable? How far does their salary go relative to their living conditions? Honestly curious.
- pie420 3y agoOr maybe this is how you keep a company alive and producing good work. Sure Disney is more profitable, but it's become a soulless corporate machine, and will falter and die in the next 30 years. Nintendo will stay profitable and will continue to produce high quality products forever.
- throwaway2037 3y agoIn your view, when and why did Disney become a "soulless corporate machine"? Many, many parents here subscribe to Disney+ to stream stuff for their kids. I've never once heard anyone use that term to describe Disney here. Honestly, it's a weird term. Are any big corps not? > will falter and die in the next 30 years Would you be willing to buy deep out of the money puts on it? I am happy to sell to you all day long. Else, this is just a rant. > Nintendo will stay profitable and will continue to produce high quality products forever. What a reach. Video game companies are much less stable than TV and film studios. No one knows what will happen to Nintendo when the old guard finally retires.
- majani 3y agoJapan has way less inflation though, so if the whole culture is on the same page then I guess it's fine
- throwaway2037 3y agoNintendo was already pretty huge before the economic bubble burst in 1990. Japan had plenty of inflation in the 1980s. Also, currently, Nintendo is wildly profitable. They could easily pay their star designers millions of USD per year, but they do not. Yet, these designers stay and continue their work.