In the gaming industry, layoffs aren’t inevitable. Jesse Schell, founder of Schell Games since 2002, has never laid off employees. He argues that the industry’s habit of hiring and firing damages trust and team dynamics. Schell promotes sustainable business practices that prioritize workplace culture, efficient decision-making, cautious outsourcing, alternatives to layoffs, and transparent risk management.
Schell believes that changing business practices rather than reducing staff is crucial. He criticizes the common approach where studio executives plan for layoffs if a game is unsuccessful.
This mentality, according to Schell, is toxic and harmful to team morale. Instead, he advocates for prioritizing people over profits, ensuring that employees feel secure and valued in their positions, which in turn fosters a more committed and effective workforce.
Creating a desirable workplace culture is central to Schell’s strategy. He stresses the importance of employee retention for strengthening relationships and enhancing team performance over time. Schell Games achieves stability by balancing work-for-hire projects with developing their own IPs.
This approach ensures that even if a project fails, jobs are not at risk. Schell also acknowledges that difficult decisions must be made when necessary but emphasizes fostering a long-term, stable working environment.
Efficiency and agility in decision-making are also key components of Schell’s strategy. Working on multiple projects simultaneously, Schell Games could expand but chooses not to in order to avoid chaos and miscommunication.
Agile development allows the team to adapt to changes and make informed decisions about project requirements. This flexibility helps manage projects effectively, ensuring they stay on time, within budget, and meet quality standards.
Outsourcing is another area where Schell adopts a cautious approach. While acknowledging the cost savings of contracting or outsourcing staff, he highlights the risks associated with it, particularly in innovative projects where trust and communication are vital.
Building long-term relationships with in-house staff, according to Schell, leads to better results and a more cohesive team, whereas outsourcing can lead to issues due to lack of familiarity and trust.
Schell also discusses alternatives to layoffs. Schell Games has faced challenging times but managed to avoid layoffs by being a bootstrap studio, relying on work-for-hire projects to fund its own IP development.
During difficult periods, the studio tightened its belt by reducing bonuses, raises, and other expenses rather than cutting jobs. This approach has helped them navigate economic downturns and project cancellations while maintaining staff stability.
Finally, Schell emphasizes the importance of being honest and pragmatic about risk mitigation. Reflecting on industry trends, he attributes recent layoffs to pandemic-induced hiring sprees followed by economic corrections. Schell advises studios to always have a backup plan and prioritize their people.
He shares a valuable lesson from Insomniac Games CEO Ted Price: caring about and prioritizing problems is crucial for solving them and avoiding layoffs. By focusing on stability and thoughtful management, studios can navigate uncertainties without resorting to layoffs.
