Microsoft Challenged by FTC Over Activision Blizzard Layoffs

US Government Questions Microsoft’s Representation Following Xbox Division Layoffs

Microsoft’s recent announcement of 1,900 job cuts within its Xbox division, including staff from Activision Blizzard acquired in the buyout, has drawn scrutiny from the United States government. The Federal Trade Commission (FTC) has raised concerns over Microsoft’s handling of the layoffs, suggesting they contradict earlier representations made during the acquisition process.

According to a memo obtained by The Verge, FTC counsel Imad D. Abyad stated that Microsoft’s layoff plan “contradicts” the company’s prior representations to the court regarding the acquisition deal. The FTC is now seeking to temporarily halt the buyout pending further review of its antitrust implications.

Microsoft’s rationale for the layoffs, outlined in its official announcement, cited the need to address “areas of overlap” between Microsoft and Activision Blizzard. However, the FTC argued that this approach contradicts Microsoft’s earlier assurances of maintaining operational independence between the two entities post-merger.

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The layoffs have had a notable impact on the workforce dynamics within both Activision Blizzard and Microsoft’s Xbox team. Prior to the workforce reduction, the Xbox division stood as a formidable force in the gaming industry, boasting a workforce of approximately 22,000 employees. However, with the recent downsizing, the division has undergone significant changes, reshaping the landscape of its internal structure and operations.

Within Activision Blizzard, the layoffs have undoubtedly left a profound impact on the affected employees, many of whom were integral members of the development teams responsible for creating some of the industry’s most iconic gaming experiences. The departure of these talented individuals not only represents a loss for the company but also raises questions about the future direction of ongoing projects and initiatives within the Activision Blizzard ecosystem.

Meanwhile, amidst the acquisition fallout, reports have emerged suggesting that Microsoft is contemplating cross-platform releases for some of its flagship titles, including Starfield, Indiana Jones and the Great Circle, and Gears of War, potentially expanding beyond the Xbox ecosystem to PlayStation and Nintendo platforms. While these plans remain unconfirmed, Microsoft has indicated that further details will be forthcoming.