The US Federal Trade Commission (FTC) has said Microsoft’s decision to make mass layoffs in its gaming division contradicts previous statements it made in court about how it planned to run the Xbox business if it acquired Activision Blizzard.
Following a court victory forMicrosoftlast year,which the FTC is currently appealing, the technology giantcompleted its $69 billion acquisition of Activision Blizzardin October 2023.
Then in January, Microsoftannounced plans to cut 1,900acrossXbox,BethesdaandActivision Blizzard, representing roughly 8% of the 22,000 employees in its gaming division.
Update8th Feb 2024 / 5:12 pm
In response to the FTC’s complaint,Microsoft has claimedthatActivisionwas already “planning on eliminating a significant number of jobs” prior to its acquisition of the company.
In a message sent to staff, Xbox bossPhil Spencersaid the decision was taken after Microsoft and Activision Blizzard’s leadership teams “set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth”.
In a complaint sent to the 9th US Circuit Court of Appeals on Wednesday (viaBloomberg), the FTC argued that this move was “inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger”.
“Moreover,” it added, “the reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief should the pending administrative proceeding result in a determination that Microsoft’s acquisition of Activision violated Section 7 of the Clayton Act.”
Further reading
Multiple Activision Blizzard studio have been impacted by the layoffs includingSledgehammer Games, Toys 4 Bob andBlizzard.
TheWorld of Warcraftstudio had an untitled survival game cancelled and over 100 people who had been working on it were reportedlytold they were being let go.
