In response to the FTC’s filing, Microsoft’s legal team has issued a statement regarding the recent layoffs at Activision Blizzard.
Microsoft x Activision Blizzard acquisition saga doesn’t seem to end. Recently, the Federal Trade Commission (FTC), previously adamant about blocking the $69 billion acquisition, has filed a notice with the US Court of Appeals, bringing attention to Microsoft’s recent actions to lay off nearly 2,000 employees, many of whom have ties to Activision Blizzard, the gaming giant recently added to the organization’s extensive portfolio.
Now, in response to the FTC’s concerns, Microsoft’s legal team has issued a statement regarding the recent layoffs at Activision Blizzard. They claim that Activision had already planned significant job cuts while operating independently.
The statement says, “Activision was already planning on eliminating a significant number of jobs while still operating as an independent company. The recent announcement thus cannot be attributed fully to the merger.”
The contention is that the layoffs in question cannot be exclusively attributed to Microsoft’s merger. Furthermore, according to Microsoft, “the FTC’s factual assertions are incomplete and misleading.” According to Microsoft, following the acquisition, the business is now structured to enable it to “divest any or all of the Activision businesses as robust market participants.”
Moreover, Activision’s current layoff plans are in line with “broader trends,” according to the court document, which has recently caused a mess in the video game industry.
FTC, through its letter to the US Court of Appeals, emphasizes that Microsoft’s move to remove numerous Activision Blizzard employees, including developers and esports professionals, directly contradicts the terms outlined during the high-profile 2023 acquisition. The statement asserts that Microsoft’s plan to eliminate 1,900 jobs, including those in its newly acquired Activision unit, goes against the promises made to the court.
The FTC is raising concerns not only about the layoffs but also about the potential impact of reversing the merger through an appeal. The mass job cuts could complicate the process of separating Activision Blizzard from Microsoft’s control, jeopardizing the FTC’s ability to unwind the acquisition.
As of now, the FTC is still in the process of appealing a district court’s decision that initially allowed Microsoft’s acquisition of Activision Blizzard to proceed. Meanwhile, Phil Spencer, the chief executive of the organization, justified the layoffs in a memo, stating that it was a strategic move to reduce “areas of overlap” in their business.
Apart from the job cuts, there are also reports indicating a broader restructuring of Microsoft’s gaming operations, with speculation about Xbox exclusives possibly appearing on rival platforms. In response to these rumors, Mr. Spencer has announced a “business update event” in the coming week to discuss the future of Xbox.
With all the recent activities surrounding Microsoft, it would be interesting to see how things turn out in the future.
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