Why are Japanese developers not undergoing mass layoffs? | Hacker News Reader

Why are Japanese developers not undergoing mass layoffs?

gamesindustry.biz

21 pointsstevev27 comments

My employer only had a profit of $850,000,000 last quarter instead of the anticipated $860,000,000.

edit: that's not a joke, that's real, those are actual numbers rounded to the nearest ten million.

This caused the line to remain flat instead of going up, and the line has only doubled in height in the last four years instead of tripling or quadrupling, so the executives decided to lay off half of the overhead staff to prove that they're doing something to turn around this sinking ship.

Now we have mechanical engineers troubleshooting PDM login issues instead of system administrators.

The PE jackals slowly tearing apart the still-living body of this century-old company are very pleased.

It seems to an outside observer who has done some limited in-country contract work for Japanese aerospace firms that Japanese companies face less of this type of pressure.

The whole "line must always go up" is completely a self-imposed injury of our tax code. There is no reason companies can't remain healthily stagnant for long periods of time and just pay out their earnings as dividends or stock buybacks. But both are heavily disincentivized by our current tax code vs all earnings coming from gains in stock value.

Interesting, I've never made that connection. Not an easy fix though I think; taxing increase in market cap, through mark-to-market has its own issues.

That's what some of the proposals to tax "unrealized" capital gains try to do, but I don't see how it wouldn't be a huge mess.

I had an economics professor who rather eloquently made the case that we should just make it a legal and fiduciary responsibility of corporations to return money to shareholders - either as dividends or buybacks. They get taxed when the profits are realized, and they can always re-invest their (taxed) earnings right back into the company if they want to.

To the extent that's true clearly we need a wealth tax.

But also it's not true. Dividends are taxed at the capital gains rate which is quite low, and for tax deferred investment schemes (which is to say, retirement savings) they're not taxed at disbursement and can be reinvested tax-free.

I think you're very confused about the mechanism behind a stock buyback. It's a way to make the stock value increase. There's no other point in doing it.

Tax deferred investments schemes are also subject to annual caps. And a tax on a dividend is still higher than a tax on "unrealized" capital gains.

> I think you're very confused about the mechanism behind a stock buyback. It's a way to make the stock value increase. There's no other point in doing it.

There is a LOT of very misleading information being pumped out there by the media about stock buybacks - almost anything you read is almost surely wrong.

If I take your investment to start a business venture, the venture is a huge success, the responsible thing to do would be to give you your money back + your share of the profit. While the share price of the remaining shares remains high or even goes up, I am still essentially "shrinking" the company.

While some orgs issue and buyback shares for money management reasons (or stock price manipulation), they are also a perfectly valid mechanism for big companies with lots of money to responsibly shrink themselves. Instead of chasing the line up and constantly asking for more investment, they are choosing to be a smaller and more profitable. It also turns huge corporate windfall gains into taxable events. I don't think they should be controversial in any way.

I was not advocating for or against stock buybacks (I have opinions but they're not relevant).

I was just pointing out that you were in error by lumping stock buybacks with dividends and contrasting both to "earnings coming from gains in stock value." Stock buybacks work by causing gains in stock value.

I'm contrasting it to corporations that never do buybacks so the only way you make money off of their stock as an investor is purely through infinite speculation.

Mechanical engineers aren't getting with the message. They should not be troubleshooting PDM login issues, simply destroy the process and reduce efficiency. Let the business burn.

> The PE jackals

This pretty much explains most of what's wrong with the current US economy.

My previous employer was a 120 year old retailer, destroyed by private equity. My current employer is 100 years old, market research firm. Currently being destroyed by private equity.

It's not just that they finanicialize everything and focus on the short term. It's also that they are genuinely bad at running companies.

They are amazing at juicing a stock price for a few quarters, enough time to make some money after buying shares and then ripping the money back out after squeezing all the remaining juice out but crushing the fruit on the vine. They are horrible at ensuring the plant itself survives for future seasons, as they rip all the roots out and stomp all over the plant in the process.

What I don’t understand is shouldn’t this create market opportunity for companies that focus on quality products? Or is it just not possible for such a company to gain a foothold against PE value juicing/extraction corporate strategies?

If this were true (and maybe it is) one could make a strategy of shorting companies after being sold by PE

My employer has a large and completely useless bureaucracy and a big problem with people doing nothing on their jobs. Yet they still refuse to do any layoffs.

I have experience (directly and via friends) at international companies with offices in Japan. When they announce layoffs, they immediately lay off their US employees. A month or so later, they lay off their European employees after going through some process. The Japanese employees are safe though because apparently it's very difficult (or impossible) to lay off Japanese employees. However, they will tell the Japanese employees they're having layoffs to trick them into quitting voluntarily.

It’s harder to fire people in Japan and Europe compared to USA.

The downside is that it is extremely hard for new grads with no experience to get their first job in Japan and Europe compares to USA.

> The downside is that it is extremely hard for new grads with no experience to get their first job in … and Europe compares to USA.

Not sure about Japan or rest of EU, but in Germany, landing a SWE with no prior experience beyond basics(watched some videos on YouTube and wrote some HTML/CSS in notepad) in larger corps is easy. Firing is also simple(2 weeks notice) during first 6 months probation period.

The counter to that counter is that I have been told that software jobs in Germany start out as very low paying. My friend who moved to Germany to work as a programmer ended up only getting about $30k a year to start, which at the time was less than half of what our peers were making in the US.

That said, I think probationary periods are one of the best ideas the US needs to adopt.

>>probationary periods are one of the best ideas the US needs to adopt

May I ask why? Both Canada and USA allow employers to fire with 2 weeks (or a month .. I forget )notice.

In the US you can be fired with 0 notice or severance, regardless of tenure in most states.

Even though you are entitled to fire people in the US, there are a lot of differing state and city rules. You are also open to (potential) lawsuits at all times. There are also now a lot of very obtuse rules about things like healthcare coverage for full time employees.

There's an extra layer of simplicity when it comes to probationary periods.

A junior/graduate dev in Germany makes €50K a year. $28K is the minimum wage for a full time employee.

>Not sure about Japan or rest of EU, but in Germany, landing a SWE with no prior experience beyond basics(watched some videos on YouTube and wrote some HTML/CSS in notepad) in larger corps is easy.

I don't think this is true at all, but even if SWE pays pretty badly in Germany, at least compared to the US.

SWE pays bad everywhere compared to the US.

Wages are also much lower in Japan than the USA. Average Japanese software developer salary is 32,164.34 USD [1]. Even accounting for purchasing power parity, it's still only ~40-50K. That's peanuts. I made $110K straight out of college, with another $100k through equity. I did get lucky through equity (at the strike price, my RSUs would only have been ~50k per year) but even excluding equity that's over twice the average Japanese developer salary for a new grad.

https://www.tokyodev.com/articles/software-developer-salarie...

In Japan, new graduates, known as "shinsotsu," have a unique opportunity to secure jobs without relevant experience beyond their schoolwork. In contrast, mid-career hires, called "cyuto-saiyo," are selected based on their skills. However, within companies, rank is determined by tenure, so unless hired specifically as a manager, even experienced hires start at the bottom, regardless of their age and experience. This age-based hierarchy is reminiscent of the traditional lifetime employment system, which persists in some conservative companies.

This system makes it relatively difficult to find jobs elsewhere, creating a negative feedback loop where employees might feel compelled to stay despite poor treatment. This is why many tolerate long working hours and unfavorable conditions. Additionally, some companies make it difficult for employees to resign, leading to the rise of resignation proxies who represent individuals in the resignation process.

I’m not sure if giving up on PS exclusives is going to cause difficulties for Square Enix at all.

I mean, I used to have a PS Vita and I enjoyed Japanese games such as the Neptunia series and Akiba’s Trip 2 and Persona 4 Golden. Most games like that come out on Steam these days.

Back in the day porting was difficult but there is no major technical difference between the current XBOX and PS and a gaming PC. Even the Switch is not all that different except it is much lower spec and requires more optimization.

Making exclusives in 2024 is just a choice to go out of business.*

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