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In 2023, Microsoft finally managed to acquire Activision Blizzard King after lengthy negotiations. There have been several obstacles in their way including Sony, the FTC, etc. And this acquisition did not come cheap; they had to pay $68.7 billion for this. Many Xbox fans might have expected a ton of exciting new things as a result of this deal, but the first thing that followed was a series of layoffs. Microsoft has laid off around 1,900 employees from its gaming division. They claimed the layoffs were due to duplication. They must have thought this had all gone unnoticed, but their fans and the FTC are already asking questions, and Microsoft has an answer for them. Microsoft suggests that all the layoffs were already in Activision’s plans before the acquisition!
Layoffs are hard on people; it is indisputable. Losing your job is never a good thing, but who is to blame? Well, in this case, people have already started pointing fingers at the most obvious culprit, Microsoft. But it’s not just a few people on the internet blaming them for these layoffs; the FTC does the same. The FTC claims that during their lengthy legal battle over the acquisition, Microsoft suggested that Activision would continue to operate independently after the purchase. In a letter they recently submitted to the United States Court of Appeals, they said: “Microsoft has told this Court that ‘the post-merger company will be structured and operated in a manner that will enable Microsoft to Easily divest all or part of Activision’s business as a robust market participant in the event of a divestiture necessity.’ » Looks like they didn’t like the “duplicate” statement made by Phil Spencer during the layoffs. They suggested that this statement is “inconsistent with Microsoft’s suggestion… that the two companies will continue to operate independently following the merger.”
This did not please Microsoft; it seemed like they expected it. They already had a statement ready, and that’s not very surprising either. They responded to the FTC’s lawsuit by claiming that Activision Blizzard Inc. had already planned to lay off workers before its merger with Microsoft Corp. Their exact statement read: “In line with broader trends in the gaming industry, Activision was already planning to cut a significant number of jobs while continuing to operate as an independent company. » This is not even surprising; Activision is infamous for laying off large numbers of employees from time to time. But the twist comes when we notice that not all of the layoffs came exclusively from Activision Blizzard; Zenimax and some Xbox employees were also affected by this wave. It remains to be seen how this will play out. After all, Microsoft had to overcome many obstacles to acquire this mega-corporation. These layoffs were in some way planned to make their company’s operations better, but they have already started to put things in jeopardy. The FTC won’t let this happen so easily.
As Microsoft and Activision now work to justify these firings, the FTC will do its best to once again push Microsoft into a legal battleground. They didn’t take their defeat last July well either. After the Microsoft Activision deal was approved by the EU, the FTC fought even harder. Microsoft, for its part, hasn’t even started to think about how to use everything they got with Activision. They undoubtedly have a ton of plans, but this call could end up putting those plans on hold for a while.