Bandai Namco relies on old tactics for workforce reduction: "Expulsion rooms" under fire

The Japanese gaming giant Bandai Namco is facing the challenges of rising costs and waning demand, leading to the cancellation of numerous projects. This has resulted in a significant reduction in staff, albeit in a traditionally Japanese manner that has left some displeased. Reportedly, the company is employing so-called "expulsion rooms," where employees are no longer assigned tasks, thereby indirectly pushing them towards voluntary resignation. Since April, about 200 of the approximately 1,300 employees at Bandai Namco Studios have been placed in such rooms, and around 100 have already left the company. Further departures are expected. This strategy is controversial, especially in a country with strict labor protection laws. Shares of Bandai Namco lost up to 1.2% in value in Tokyo. The company itself denies the existence of such expulsion rooms and emphasizes that decisions to halt game development are thoroughly reviewed. The aim is not to drive employees out of the company. Bandai Namco points to its long tradition in the gaming industry, from the iconic game Pac-Man to current titles like Dragon Ball and Gundam. Competitors are also under pressure given the market conditions—Sony recently canceled an expensive title, and Square Enix reported significant write-downs due to game cancellations. Smartphone and online games are particularly affected, forcing Bandai Namco to make write-downs in the billions. Additionally, several projects, including one in collaboration with Nintendo, have been halted. There is also the allegation from an anonymous website accusing Bandai Namco of other questionable methods of influencing employees, which the company denies.