FTC Accuses Microsoft Layoffs Contradicting Court Testimony

Microsoft is currently facing scrutiny from the Federal Trade Commission (FTC) over a wave of layoffs that allegedly contradicts the company's previous statements during their legal battle over the acquisition of Activision Blizzard. The FTC has filed a complaint after Microsoft announced the dismissal of approximately 1,900 employees within its gaming division, which now includes Activision Blizzard.

The FTC's complaint suggests that these layoffs are not in line with Microsoft's earlier promises to keep Activision Blizzard operating independently. There seems to be concern over function overlaps between Microsoft and Activision Blizzard, leading to speculation about their integration process. The FTC is proposing that the integration of Activision Blizzard into Microsoft be halted while they investigate these new developments.

Although Microsoft has not provided specific details about the layoffs, reports indicate that jobs have been cut from several studios under its umbrella, including Blizzard, Sledgehammer Games, and Toys 4 Bob, with the latter losing around 86 positions.

The layoffs at Microsoft have raised concerns that the company is not maintaining the operational independence of Activision Blizzard as was allegedly promised during the FTC case. If the layoffs indicate a deeper integration of the two companies, it could potentially affect the dynamic within the gaming industry and lead to further regulatory scrutiny on the part of the FTC.

Background Information:

Microsoft’s acquisition of Activision Blizzard, a $68.7 billion deal announced in early 2022, is one of the largest in the gaming industry's history. It brings under Microsoft's control franchises like "Call of Duty," "World of Warcraft," and "Overwatch." This deal has been under the microscope due to anti-competition concerns, as it would significantly consolidate power in the industry and could impact future game availability on competing platforms. The outcome of the FTC’s investigations could dictate how power is balanced in the gaming industry moving forward.