Microsoft Refutes FTC’s Claims on Job Cuts Post Activision Blizzard Acquisition
Microsoft has countered the allegations made by US regulators accusing the tech giant of reneging on promises by implementing job reductions following its monumental acquisition of Activision Blizzard. In January, three months
after finalizing the $69 billion deal, Microsoft Gaming disclosed the termination of 1,900 positions.
The Federal Trade Commission (FTC) has argued that this move directly contradicts prior assurances given by Microsoft. However, Microsoft maintains that the decision for job cuts was not a consequence of the acquisition. The company elaborated that, in line with the broader gaming industry’s trends, Activision Blizzard had already contemplated significant job cuts as an independent entity, as per Microsoft’s statement in a court document.
This acquisition, under scrutiny, positions Microsoft at the helm of leading gaming titles like Call of Duty, World of Warcraft, and Candy Crush. While the deal initially faced obstacles in the UK, it proceeded after Microsoft agreed to certain concessions.
Despite the UK’s approval, the FTC is pursuing a halt on the merger through the Court of Appeals to evaluate potential anti-trust issues. The regulator suggests that the merger could be reversed if it prevails, or Activision Blizzard might be divided or blocked entirely. The FTC argues that the recent layoffs complicate the potential reversal of the merger, emphasizing the urgency for an injunction.
The FTC has labelled the rationale behind the layoffs as “inconsistent” with Microsoft’s earlier commitments to keep Activision Blizzard running as a separate entity. This stance challenges Microsoft’s assertion that the gaming company’s operations remain independent.
Microsoft, however, asserts its adherence to previous statements made to the court regarding the acquisition’s handling. Phil Spencer, the CEO of Microsoft Gaming, had indicated in a memo that the layoffs aimed to eliminate redundant roles within the organization.
Amidst these developments, there’s speculation about Microsoft’s broader restructuring of its gaming division, including the possibility of Xbox exclusives being available on competing platforms. In light of these discussions, Spencer has announced an upcoming “business update event” to outline the future direction of Xbox.
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