One week after Microsoft laid off practically 2,000 staff in its gaming division, the Federal Commerce Fee is accusing Microsoft of contradicting its pledge to permit Activision Blizzard to function independently post-acquisition. The FTC filed a complaint in a federal appeals court docket on Wednesday, arguing that final week’s downsizing, which affected staff of Activision Blizzard, “contradicts Microsoft’s representations on this continuing.” The FTC is asking for a brief pause of Microsoft’s acquisition of Activision Blizzard because it additional investigates potential antitrust points.
In its arguments to the FTC over the past two years, Microsoft mentioned it might deal with Activision Blizzard as a vertical acquisition and recommended that it would not have to institute layoffs, since there could be no redundancies. On January 30, Microsoft introduced it was cutting 1,900 jobs throughout Activision Blizzard, ZeniMax and Xbox after figuring out “areas of overlap” particularly between Microsoft and Activision Blizzard. This discrepancy is the core of the FTC’s criticism.
“Microsoft’s recently-reported plan to remove 1,900 jobs in its online game division, together with in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court docket,” the FTC’s criticism mentioned. “Particularly, Microsoft reportedly has acknowledged that the layoffs had been a part of an ‘execution plan’ that would cut back ‘areas of overlap’ between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Court docket that the 2 corporations will function independently post-merger.”
Although the UK’s Competitors and Markets Authority approved Microsoft’s $69 billion acquisition of Activision Blizzard in October, the FTC hasn’t seen satisfaction relating to its personal antitrust considerations. The FTC remains to be difficult the acquisition, which suggests there is a chance that Microsoft shall be pressured to divest all or a part of Activision Blizzard.
In Wednesday’s criticism, the FTC argued that the current layoffs additionally undermine its personal capability to order reduction for workers who had been negatively affected within the acquisition.
Microsoft’s layoffs be part of an avalanche of mass firings within the online game trade, particularly prior to now few months. An estimated 10,500 folks in video video games misplaced their jobs in 2023 — and already in 2024, 6,000 staff have been laid off.
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