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Sony on Tuesday announced The layoffs will affect 900 jobs in the PlayStation division, or about 8% of the division’s staff worldwide. The move follows layoffs at other video games this year. microsoft’s Decision to lay off 2,000 people in games division and Unity SoftwareCompany resetThis included cutting 25% of its workforce.
In the face of layoffs, some employees asking Why some CEOs don’t take pay cuts, similar to former Nintendo CEO Satoshi Iwata’s 50% pay cut in 2013 to avoid layoffs.
Related: Snap to cut 10% of global workforce due to “difficult restructuring decision”
Iwata said At the time, he decided not to do so, even though “some employers have announced restructuring plans to improve financial performance by laying off many employees,” because “Nintendo “I believe that because our employees make valuable contributions in their respective fields,” laying off a group of employees will not help Nintendo strengthen its business in the long run. ”
Former Nintendo president Satoshi Iwata responds to an interview in Tokyo on Thursday, May 8, 2014. Credit:Tomohiro Ohumi/Bloomberg via Getty Images
Some CEOs are already following suit.
Zoom CEO Eric Yuan has taken a 98% pay cut. Salary $301,731 I decided not to receive a company bonus for 2023 because my company made me redundant last year. 15% of the team Or about 1,300 people.
in 2023 resume builder report66% of executives surveyed said they had taken a pay cut in the past six months, and 94% said it was to prevent or reduce layoffs.
Related: How companies decide who to fire
Still, CEO compensation includes more than salary, so some pay cuts aren’t as sacrificial as they seem. For example, Yuan directly controls over 13% of Zoom. According to Bloomberg, which brings his fortune to an estimated $5 billion.And he CEO is still making a profit. almost 400 times As an average worker.
There are two reasons why CEOs don’t reduce salaries to avoid job cuts:
1. Calculations do not match
CEOs who refuse to take pay cuts may cite financial reasons.according to chris williamsThe former Microsoft vice president of human resources says some CEOs believe that cutting salaries in half doesn’t have the same economic impact as laying off employees. maybe. The numbers will be unbalanced.
For companies like Google and Microsoft, cutting 10,000 employees “could save approximately $1 billion a year,” Williams wrote. At Business Insider. “Even if we cut CEO pay entirely, we would only save 0.2%.”
Related: Fired woman records harrowing call with human resources department and goes viral: ‘They tried to gaslight you’
2. Companies don’t need to retain existing talent
Mr. Iwata decided to take a pay cut to boost morale while Nintendo employees worked on their jobs. make a profit The Switch itself was released in 2017.
Nintendo “needed to retain that talent,” executive coach Rohan Verma said. CNBCAnd CEOs who follow Iwata’s lead and take pay cuts need to make sure that their company’s strategy is still sound and that the products they’re offering are still relevant to the market.