Microsoft Responds to FTC Claims of Contradiction in Gaming Division Layoffs After Activision Blizzard Acquisition
In a recent development, Microsoft has issued a response to the US Federal Trade Commission (FTC) regarding allegations that its decision to lay off employees in its gaming division contradicts statements made during the court proceedings related to the acquisition of Activision Blizzard. The FTC had raised concerns about Microsoft’s commitment to maintaining the independence of Xbox after the merger.
Earlier this year, Microsoft had announced plans to cut 1,900 jobs across Xbox, Bethesda, and Activision Blizzard, which accounted for approximately 8% of the total workforce of 22,000 employees in its gaming division. The FTC argued that this move was inconsistent with Microsoft’s previous claims that the two companies would operate independently post-merger.
Responding to the FTC’s claims, Microsoft’s lawyers have stated that the factual assertions made by the commission are incomplete and misleading. They argue that Activision Blizzard had already planned significant job cuts even if the acquisition had not taken place. According to Microsoft’s lawyers, layoffs have been occurring across the gaming industry as a whole, and Activision Blizzard’s decision cannot be solely attributed to the merger.
Microsoft’s announcement in January about the job cuts affected various studios within Activision Blizzard, including Sledgehammer Games, Toys 4 Bob, and Blizzard. The World of Warcraft studio also had an untitled survival game canceled, resulting in over 100 employees being let go.
In a separate statement, a Microsoft spokesperson emphasized that the FTC’s opposition to the deal overlooks the changes that have occurred since the court ruling last July. The UK competition authority had mandated Microsoft to restructure the acquisition globally, leading to the company not acquiring the cloud streaming rights to Activision Blizzard games in the United States. Additionally, Microsoft and Sony signed a binding agreement to ensure that Call of Duty remains available on PlayStation under even better terms than before.
The response from Microsoft sheds light on the complexities surrounding the layoffs in its gaming division. While the FTC has raised concerns about the company’s commitment to maintaining the independence of Xbox, Microsoft’s lawyers argue that the job cuts were already part of Activision Blizzard’s plans. The ongoing developments in the aftermath of the acquisition continue to shape the gaming landscape, impacting both employees and players alike.
As the gaming industry undergoes significant changes, it remains to be seen how Microsoft’s acquisition of Activision Blizzard will ultimately shape the future of Xbox and the gaming experiences it offers. The fallout from the layoffs serves as a reminder of the challenges and complexities involved in merging two major players in the gaming industry.
