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

The US Federal Trade Commission (FTC) has said Microsoft’s decision to make mass layoffs in its gaming division contradicts previous statements it made in court about how it planned to run the Xbox business if it acquired Activision Blizzard.

Following a court victory for Microsoft last year, which the FTC is currently appealing, the technology giant completed its $69 billion acquisition of Activision Blizzard in October 2023.

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

In a message sent to staff, Xbox boss Phil Spencer said the decision was taken after Microsoft and Activision Blizzard’s leadership teams “set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth”.

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

“Moreover,” it added, “the reported elimination of thousands of jobs 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.”

Further reading

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New details about Blizzard’s cancelled survival game have been revealed

Codenamed Odyssey, it was reportedly in development for six years

Multiple Activision Blizzard studio have been impacted by the 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.