FTC Throws Punches as Microsoft Axes 1,900 Jobs Post Activision Mega-Deal!

Microsoft Gaming cut 1,900 jobs three months after buying Activision for $69 billion, but the Federal Trade Commission is concerned, thinking the layoffs contradict Microsoft’s promises, leading to a legal dispute over the merger. [Image: Jaap Arriens (Getty Images)]

In January, Microsoft Gaming made headlines by announcing 1,900 job cuts, just three months following its completion of the $69 billion (£56 billion) acquisition. However, the Federal Trade Commission (FTC) raised concerns, deeming these layoffs contradictory to Microsoft’s earlier assurances.

Microsoft clarified that the decision for job cuts wasn’t solely influenced by the acquisition. According to the firm’s filing with the US court, Activision, the acquired company, had already been contemplating significant job reductions in line with industry trends.

The acquisition granted Microsoft control over prominent gaming titles like Call of Duty, World of Warcraft, and Candy Crush. Initially met with resistance in the UK, the deal proceeded after Microsoft made concessions.

Despite approval, the FTC persisted in seeking an injunction from the Court of Appeals to address potential anti-trust implications. If successful, the FTC could either approve the merger with conditions or opt to break up Activision Blizzard or prevent the merger altogether.

The FTC argued that the layoffs could complicate the reversal of the merger if the injunction were granted. They deemed Microsoft’s explanations for the job cuts inconsistent with its promises to operate Activision Blizzard independently.

Microsoft, however, reaffirmed its commitment to its previous statements. Phil Spencer, CEO of Microsoft Gaming, justified the layoffs as a measure to streamline overlapping areas within the business.

In light of rumors suggesting broader changes in Microsoft’s gaming strategies, including the possibility of Xbox exclusives extending to other platforms, Mr. Spencer announced an upcoming “business update event” to address the future direction of Xbox.