Nintendo 2014 Case¶

This article dives deep into what happened in Nintendo in 2011-2013. It will also have one invited guest - a French philosopher of the mid-XX century, Albert Camus. Read to connect the dots and understand easily how all this relates to the massive layoffs of 2026.

Camus¶

Albert Camus (1913-1960) was a French philosopher, novelist, author, dramatist, journalist, world federalist, and political activist. Among other things, he wrote extensively about how bureaucracies and states turn human suffering into abstract concepts, and how dangerous that is.

Neither Victims Nor Executioners (1946)¶

This is a series of eight essays Camus wrote for Combat, the underground French Resistance newspaper he edited. In it, he directly tackles how political ideologies turn living people into administrative data.

In the essay titled "The Self-Deception of the Century," he writes famously about how modern politics is entirely driven by abstraction:

"The great event of the twentieth century was the introduction of mass murder into political calculus... You can only kill a man if you turn him into an abstraction first."

He argued that when a state or an ideology deals in abstract concepts—like "The Proletariat," "The Reich," "Historical Destiny," or even "The National Interest"—it becomes incredibly easy for bureaucrats to order the deaths of millions. You are no longer killing a person with a family, a face, and a soul; you are simply clearing an obstacle to an abstract mathematical formula.

The Rebel (L'Homme Révolté, 1951)¶

This is Camus's definitive book-length philosophical critique of political violence. He looks at how the great revolutions of history (including the French and Russian revolutions) began with a beautiful, human desire to stop injustice, but ended up creating terrifying, bureaucratic police states.

In The Rebel, he introduces the concept of "Crimes of Logic" (crimes de logique). He explains that the mass murders of the 20^th century were not crimes of passion—they were cold, calculated, premeditated, and logical.

He notes that a bureaucrat sitting at a desk, looking at spreadsheets and signing death warrants, thinks they are acting completely rationally because they have replaced the physical, messy reality of human flesh with the clean, neat lines of political theory.

"The Human Crisis" (Lecture, 1946)¶

When Camus visited the United States right after the war, he delivered a speech at Columbia University detailing the moral collapse of Europe. He described a world where people had been completely separated from their humanity by state machinery:

"We gasp for air among people who believe they are absolutely right, whether it be in their machines or their ideas... We live in a world of abstractions, of bureaus and machines, of absolute ideas and messianisms without nuance."

He gave a chilling example of an ordinary, polite German bureaucrat who loved his family but would go to work and calmly calculate the logistics of train schedules to concentration camps. That bureaucrat wasn't a monster in his daily life; he was just a man entirely blinded by the "abstractions" of his job.

Summary of His Point¶

Camus’s ultimate conclusion was that the antidote to abstraction is dialogue and stubborn empathy. The moment you look at another person and recognize their inherent right to live, you destroy the state's spreadsheet. He believed that our only real duty in the modern world is to refuse to be an executioner, and refuse to let ourselves be turned into silent victims of someone else's calculation.

2026 Translation¶

Whether it is a dictator deciding a border conflict, a war room calculating "acceptable collateral damage," or a tech executive layout a mass termination via a Zoom webinar or a cold script—the psychological mechanism is identical.

It is the practice of turning a human reality into a cold spreadsheet optimization.

The Tech Layoff Connection¶

How corporate layoffs of 2025-26—especially the brutal waves seen across the AI and tech sectors—are structured:

• The Language: HR and executives use phrases like "resource optimization," "headcount reduction," "re-aligning skillsets," or "right-sizing." Just like the state's military jargon, this language is explicitly designed to sanitize the reality. It ensures the person making the decision doesn't have to say, "We are destroying the livelihoods of 10,000 human beings today to tick our stock price up by 2%."
• The Mechanism: The people being fired are reduced to a line item—a metric of cost versus output. The algorithm or the spreadsheet calculates that cutting row 457 through 890 improves the "efficiency" of the corporate body.
• The Distance: Leaders deliver these notices via mass emails or locked, one-way video streams where the employees are muted. This is the ultimate corporate version of what Camus called "moral distance." If you don't have to look into the eyes of the person you are hurting, you can pretend your action is purely logical, elegant, and "necessary."

The "Algorithm" as the New Bureaucracy¶

In The Rebel, Camus warned that when we treat human beings as mere "clay to be molded" by administrative systems, we lose our souls.

Today, we have replaced the mid-century bureaucrat with the AI algorithm and the financial spreadsheet. The chilling part is that the people implementing these layoffs genuinely believe they are acting completely rationally. They believe they are just obeying the cold, unyielding laws of the market—just as 20^th-century tyrants believed they were just obeying the unyielding laws of "Historical Destiny."

Details¶

If company A Fires and Company B Does Not¶

The phrase—“If company A fires and company B does not, company B loses”—is the ultimate modern mantra of corporate survival. It sounds like an absolute, scientific law of physics.

But when we look closely at how the actual business world works, the answer is: No, it is not entirely correct. It is a confusion of a short-term, defensive tactic with a permanent, unyielding law.

In fact, the idea that relentless, data-driven layoffs are the only way to win is often a massive miscalculation. We can look at this through both economic data and the very philosophy we’ve been discussing.

The Financial Reality: Layoffs Don't Always Work

The belief that cutting "human cost" automatically makes a company more competitive is often contradicted by actual market data.

• The Academic Evidence: Decades of management studies (including extensive research from Harvard Business Review and Wharton) show that companies that engage in mass layoffs often underperform their competitors in the long run.
• The Hidden Costs: A spreadsheet easily captures the money saved on salaries. What a spreadsheet cannot easily capture is the destruction of corporate memory, the collapse of employee morale, the drop in innovation, and the massive costs of rehiring and retraining people when the market bounces back.

When Company A fires 10% of its workforce, its stock price might jump for a quarter because investors see lower costs. But two years later, Company B (which kept its people) often sprints ahead because its workers are loyal, its teams are stable, and it didn't destroy its own institutional knowledge.

The Illusion of "Systemic Inevitability"

The argument "If we don't do it, we lose" is a classic example of game theory gone wrong. It creates a self-fulfilling prophecy.

If every CEO looks at their competitor and says, "They are cutting people, so I must cut people to stay lean," it triggers a stampede. It's called copycat behavior. In the tech sectors, many companies initiated mass layoffs not because they were losing money, but simply because everyone else was doing it, and executives wanted to prove to Wall Street that they were being "disciplined."

It isn't an unyielding law of the market; it is a choice driven by fear and peer pressure among executives.

The Camus Perspective: Shifting the Blame to the "System"

This brings us right back to Albert Camus. When a CEO says, "The laws of the market forced me to do this," they are engaging in a psychological trick called externalization of responsibility. They are pretending that they have no agency, no choice, and no moral freedom. They paint "The Market" as an omnipotent, invisible god that demands human sacrifices.

Camus’s whole philosophy was a rebellion against this exact excuse. He argued that the moment you say, "The system made me do it," you are choosing to be a cog instead of a human being.

A market is not a force of nature like gravity or a hurricane. A market is an artificial construct made by humans, for humans. If the rules of that market dictate that you must destroy human lives just to survive, then the rules of that market are broken—and blindly following them isn't "rationality," it is a lack of courage to find a better way.

Conclusion

When Company A fires just because the system rewards it in the short term, they aren't obeying an unyielding law—they are taking the easy way out. They are choosing the clean, heartless lines of the spreadsheet over the messy, difficult work of long-term human leadership.

Hyper-Short-Termism¶

It is important to understand how a modern CEO is actually compensated to realize that the spreadsheet isn't just a tool they use—it is a weapon they employ to maximize their personal wealth before exiting the building.

The Incentive Trap: Why CEOs Don't Care About the Long Term

If a CEO truly cared about the company's survival ten years from now, they would act like a human custodian. But the system is designed to make them act like smash-and-grab mercenaries. Here is how the mechanics of their logic work:

The Short Tenure

The average tenure of a Fortune 500 CEO is only about five to seven years. They know they are not going to be at the company long enough to see the long-term consequences of their decisions. If a mass layoff destroys employee morale and stops innovation, those rot-sectors won't show up in the financial data for three to four years. By the time the company starts to tank, the CEO will have already moved on to another company or retired to a yacht.

Stock Options and Pump-and-Dump Dynamics

The vast majority of a modern CEO's wealth does not come from their base salary; it comes from stock options and bonuses tied directly to short-term performance metrics (like hitting a specific share price or earnings-per-share target this quarter).

• Step 1: The CEO announces a massive layoff.
• Step 2: The spreadsheet looks clean. Wall Street applauds the "cost-cutting measures." The stock price spikes.
• Step 3: The CEO immediately cashes out millions of dollars in stock options based on that artificial spike.

They have legally extracted wealth from the company by liquidating its human capital.

The "Golden Parachute" (No Penalty for Failure)

In the real world, if you fail catastrophically at your job, you get fired and struggle to pay rent. In the upper echelons of corporate executive culture, if you fail, you get a Golden Parachute—a massive payout worth tens of millions of dollars just to leave.

Because they are financially insulated from the consequences of their own bad math, they have zero skin in the game. They are entirely rational actors within a deeply irrational, short-termist system.

The Two Playbooks: Extraction vs. Creation

This allows us to see the two entirely different philosophies of leadership side by side:

"Over-Hiring" Myth¶

When a company goes on a massive expansion phase, the executives don't do it out of charity. They do it because they need human minds and human hands to build products, write software, close deals, and scale the business.

During that boom period:

• The Workers Build the Engine: The employees work late nights, innovate, solve complex problems, and build the infrastructure that makes the company incredibly valuable.
• The Company Bags the Revenue: The company’s actual value, market cap, and cash reserves skyrocket because of that collective human labor.
• The Executive Payday: The CEO points to this massive growth, takes credit for it on quarterly calls, and cashes out tens of millions in bonuses and stock options.

The value doesn't just vanish. It is created by the workers, harvested by the company, and stored in the corporate bank accounts.

The "Disposable Scaffold" Illusion

When the market cools down, the spreadsheet executive looks at the company and says, "We need to protect our profit margins to keep our stock price high."

Instead of using the massive mountain of cash that the workers just helped them build to protect those workers during a downturn, they treat the workforce like scaffolding on a finished building. They use your labor to build the skyscraper, and the moment the structure is standing, they tear the scaffolding down and throw it in the trash, pretending it was never a necessary part of the building's success.

When they call people "over-hired," they are trying to retroactively gaslight everyone into believing those employees were just "dead weight" or a "cost burden."

They weren't a burden. They were the engine.

The spreadsheet logic allows a CEO to say:

"Your labor was valuable to us yesterday when we wanted to grow, but your security is a liability to us today when we want to cut costs."

They extract the value you created, keep it for themselves, and then lock the door on you. It is a deeply parasitic relationship disguised as "rational economics." You didn't fail to create value; they simply decided they were finished harvesting it from you for the season, and they lacked the moral courage to use the wealth you built to keep you safe.

Nintendo 2011-2014¶

When a hardware console struggled, Nintendo's president, Satoru Iwata¹ restructured executive compensation across the entire company: during the two crisis periods—first in 2011 (when the Nintendo 3DS had a disastrously slow launch) and again in 2014 (when the Wii U flopped)—Iwata implemented a top-down tier of sacrifice:

• Satoru Iwata (President): Cut his base salary by 50%.
• Shigeru Miyamoto & Genyo Takeda (Senior Directors): Cut their salaries by 30%.
• The Rest of the Board of Directors: Cut their salaries by 20%.
• Executive Bonuses: Completely eliminated for the entire leadership team until the company returned to profitability.

This was accompanied by refusal to layoff the employees:

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.

No-layoff¶

In the same 2013 briefing, an investor directly asked him why he wouldn't restructure (a corporate euphemism for layoffs) to make the financial reports look better. Iwata responded by explaining that Nintendo's value is entirely tied to its human creators:

We should also take into account that our business has wild fluctuations. Of course, cutbacks are necessary if a certain division is clearly redundant. However, at Nintendo, every single employee contributes to our strengths in their respective positions. Therefore, I do not believe that cutting our headcount can lead to the long-term strengthening of Nintendo's business.

People are Value¶

Two years prior, in July 2011, after Nintendo had to drastically cut the price of the 3DS just months after launch to save it, Iwata was already defending his staff against investors demanding layoffs. He stated:

Regarding the reduction of personnel, we do not have such a plan at this moment. In the gaming industry, where the trend can change quite rapidly, losing the talent that creates the value of our platforms would mean losing our competitive edge in the long run.

Personal Responsibility¶

Iwata believed that if a company is struggling, the burden must be carried by the leadership, not the staff. When he announced his 50% salary cut, he explained his philosophy on executive responsibility:

I should not simply be a bystander when the company is in a difficult situation. I believe that it is my responsibility to show a clear stance to our shareholders, employees, and consumers that management is taking responsibility for the current financial performance.

Current Conclusions and Open Questions¶

Current Conclusions:

1. Refuse to be an executioner.
2. Refuse to be a silent victim of someone else's calculation.
3. Be stubbornly empathetic: look at another person and see them.

Open Questions:

1. Will we?