Microsoft replies to the FTC’s complaint about layoffs, says Activision was already planning job cuts

Microsoft has responded to claims by the US Federal Trade Commission (FTC) that its decision to make mass layoffs in its gaming division contradicts statements it made in court about how it would run Xbox after acquiring Activision Blizzard.

In January, Microsoft announced plans to cut 1,900 jobs across Xbox, Bethesda and Activision Blizzard, representing roughly 8% of the 22,000 employees in its gaming division.

In a complaint sent to the 9th US Circuit Court of Appeals on Wednesday, the FTC argued that this move was “inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger”.

Now, Microsoft’s lawyers have responded to the FTC’s claim, saying its “factual assertions are incomplete and misleading”.

In a letter forwarded to VGC, Microsoft’s lawyers claim that Activision Blizzard was planning to make large-scale layoffs even if the acquisition hadn’t gone ahead, noting that job cuts have been occurring across the industry as a whole.

“Consistent with broader trends in the gaming industry, Activision was already planning on eliminating a significant number of jobs while still operating as an independent company,” they claim.

“The recent announcement thus cannot be attributed fully to the merger.”

In a separate statement, a Microsoft spokesperson told VGC: “In continuing its opposition to the deal, the FTC ignores the reality that the deal itself has substantially changed.

“Since the FTC lost in court last July, Microsoft was required by the UK competition authority to restructure the acquisition globally and therefore did not acquire the cloud streaming rights to Activision Blizzard games in the United States.

“Additionally, Sony and Microsoft signed a binding agreement to keep Call of Duty on PlayStation on even better terms than Sony had before.”

Further reading

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FTC complains about Microsoft’s decision to cut Activision Blizzard jobs in court filing

Update: Microsoft says Activision was planning to cut a significant number of jobs pre-merger

Multiple Activision Blizzard studio have been impacted by Microsoft’s recent layoffs, including Sledgehammer Games, Toys 4 Bob and Blizzard.

The World of Warcraft studio had an untitled survival game cancelled and over 100 people who had been working on it were reportedly told they were being let go.