Microsoft's recent announcement of layoffs of 1,900 employees within its Xbox division, including Activision Blizzard employees who joined Microsoft in the acquisition, has prompted the US government to recall Microsoft. The US Federal Trade Commission (FTC) said in… note (across the edge) that the layoff plan “contradicts” the way Microsoft presented itself in its procedures for completing the deal in the first place.
Microsoft's $74.5 billion deal to buy Activision Blizzard has already been concluded, but the FTC said it is trying to pause the acquisition pending the FTC's ruling on its antitrust merits.
“Microsoft’s recently reported plan to eliminate 1,900 jobs in its video game division, including its newly acquired Activision unit, is inconsistent with previous representations it made to this court,” said Imad Abyad, FTC counsel.
In its own announcement detailing the layoffs, Microsoft said it was making cuts in “areas of overlap” that existed between Microsoft and Activision Blizzard. The FTC said this “is inconsistent with Microsoft's suggestion to this court that the two companies would operate independently after the merger.”
Microsoft's recent round of 1,900 layoffs affected developers and employees from across Activision Blizzard, as well as roles that existed within Microsoft. Microsoft's Xbox team had about 22,000 employees before the cuts.
A Microsoft spokesperson told GameSpot that the FTC is ignoring reality.
“In continuing to oppose the deal, the FTC is ignoring the fact that the deal itself has changed significantly,” a representative said. “Since losing to the FTC in court last July, Microsoft has been required by the UK competition authority to restructure its acquisition globally, and therefore has not acquired the cloud streaming rights to Activision Blizzard games in the US. Additionally, it has signed “Sony and Microsoft have a binding agreement to keep Call of Duty on PlayStation on better terms than Sony had before.”
In other Xbox news, Microsoft is reportedly considering bringing some of its games, including Starfield, Indiana Jones and the Great Circle, and Gears of War, to PlayStation and Nintendo. This has not been confirmed yet, but the company said it will share more details soon.
