Microsoft's Recent Layoffs Contradict Activision Blizzard Buyout Pledges, Says FTC | Push Square
12.02.2024 - 23:47
/ Pete Hines
/ Stephen Totilo
In case you missed it, Microsoft made an industry-shaking acquisition at the tail end of last year, buying up Activision Blizzard King for an eye-watering $69 billion. It took a long time to close, though, because of intense scrutiny from a handful of different sources — one of those being the USA's Federal Trade Commission (FTC). Now, in the wake of Microsoft cutting thousands of jobs, the FTC is back on the company's case, accusing it of contradicting statements made in court about how the business would operate post-acquisition.
The aforementioned layoffs have affected teams within Activision Blizzard and Bethesda as well as Microsoft, with about 1,900 employees made redundant. Microsoft stated that these cuts were being made to address «areas of overlap» between the companies. This, according to the FTC, goes against what the Redmond corporation assured in court before the deal closed. An official complaint has been issued to the 9th US Circuit Court of Appeals. In it, the FTC says Microsoft's job cuts are «inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger».
Additionally, it argues that the action from Microsoft «undermines the FTC’s ability to order effective relief should the pending administrative proceeding result in a determination that Microsoft’s acquisition of Activision violated Section 7 of the Clayton Act». In other words, if the acquisition is deemed illegal — which is still possible, as the FTC is appealing against it — the layoffs prevent the FTC from helping those affected.
Since this complaint was filed, Microsoft's legal team has put out a statement on the matter. Shared by journalist Stephen Totilo, Microsoft essentially says Activision was already planning a round of layoffs before they were acquired. «Activision was already planning on eliminating a significant number of jobs while still operating as an independent company,» the letter reads.
We're not out of the woods yet, then. What do you make of all this? Discuss in the comments section below.
Having grown up alongside PlayStation, Stephen has developed an eclectic taste in video games and a wide knowledge of the medium, from small indie gems to the biggest AAA blockbusters. Ever hopeful that the Burnout series makes a miraculous return.
I love how Pete Hines saw the writing on the wall and retired before the you know what hit the fan. Smart guy.
Microsoft lied to get their way? I am shocked!!! Who could have ever foreseen a company with a history of saying one thing and doing another would do just that after getting the acquisition approved by a Microsoft judge??
Hopefully, the ABK disaster can be unwound.
It would be crazy if this blocked the merger.