Bandai Namco Begins to Cut Workforce After Cancelling Games

Video game publisher Bandai Namco Holdings is cutting its workforce after canceling several titles due to lackluster demand, according to people familiar with the matter.

The Tokyo-based company is taking a traditionally Japanese approach to reducing staff and sending workers to rooms where they are given nothing to do, putting pressure on them to leave voluntarily, said the people, asking not to be named discussing private information. Since April, affiliate Bandai Namco Studios has moved about 200 of its roughly 1,300 employees to such rooms and nearly 100 have resigned, said the people. More are expected to leave in coming months, they said.

Such oidashi beya, or “expulsion rooms,” are sometimes used by Japanese corporations in a country with some of the world's strictest labor-protection laws. Employees are typically given no work-related tasks, but are left with the knowledge that their performance will give managers ammunition to cut severance when they do leave. Many employees use their time in such rooms to look for other jobs.

Bandai Namco said its goal is not to push employees out of the company.

“Our decisions to discontinue games are based on comprehensive assessments of the situation. Some employees may need to wait a certain amount of time before they are assigned their next project, but we do move forward with assignments as new projects emerge,” a representative of Bandai Namco said. “There is no organization like an ‘oidashi beya' at Bandai Namco Studios designed to pressure people to leave voluntarily.”

Bandai Namco is a storied name in the games industry, tracing its roots back to the introduction of the Pac-Man arcade title in 1980. Its current games include Dragon Ball and Gundam.

Like its competitors, the company's now under pressure to cut costs and adjust to a post-pandemic drop in the time users have for games. Smartphone and online games have born the brunt of cooled sentiment, forcing Bandai Namco to overhaul its game title lineup, resulting in JPY 21 billion ($141 million or roughly Rs. 1,185 crore) in writedowns in the three quarters to December. 

Over the summer, the company further shuttered smartphone game Tales of the Rays and said it would take down big-budget online game Blue Protocol in January. It's also decided to either cancel or pause development of several games, including ones that feature characters from animes Naruto and One Piece, as well as a project commissioned by Nintendo.

Rival Square Enix Holdings also canceled multiple loss-making smartphone titles, while Sony Group pulled the plug on online game Concord just two weeks after its launch.

An anonymous website launched last month alleges that Bandai Namco is using various methods to persuade people to leave. The company is aware of the website, but the information is not accurate, a representative said, declining to elaborate.

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