March 2, 2024

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Microsoft Rebuts FTC Allegations Regarding Activision Blizzard Layoffs

Microsoft rebuffs assertions by US regulators regarding job reductions subsequent to the Activision Blizzard acquisition, marking the most substantial gaming deal to date.

In January, Microsoft Gaming disclosed the termination of 1,900 positions, prompting scrutiny from the Federal Trade Commission (FTC) over purported contradictions to prior assurances.

The technology behemoth maintains that Activision had independently planned layoffs before the merger, citing alignment with prevailing industry trends. Microsoft asserts that the recent job cuts were not exclusively prompted by the merger.

The acquisition grants Microsoft control over revered titles such as Call of Duty and Candy Crush. Initially challenged in the UK, the deal progressed post-Microsoft concessions.

Despite regulatory endorsement, the FTC seeks intervention from the Court of Appeals to assess potential antitrust implications. If successful, the FTC could compel divestiture or even obstruct the merger, highlighting the ramifications of layoffs on reversal endeavors.

The FTC deems Microsoft’s justifications for layoffs ‘inconsistent’, contending they contravene commitments to uphold Activision Blizzard’s autonomy.

Phil Spencer, CEO of Microsoft Gaming, cited layoffs as a measure to mitigate operational overlaps. Concurrently, speculation arises regarding the potential migration of Xbox exclusives to rival platforms, prompting an imminent ‘business update event’ to elucidate Xbox’s trajectory.

Microsoft emphasises its steadfast commitment to prior declarations made to the court. Phil Spencer had previously outlined in a memo that the layoffs were aimed at minimising ‘areas of overlap’ in business operations.

Separately, reports suggest Microsoft is contemplating a broader overhaul of its gaming operations, including the possibility of Xbox exclusives appearing on competing platforms.

In response, Mr. Spencer has announced a forthcoming ‘business update event’ to deliberate on ‘the future of Xbox’. This move underscores Microsoft’s strategic endeavours to navigate the evolving gaming landscape and reaffirm its position as a dominant force in the industry.