The FTC Is Looking Into Microsoft’s 1,900 Activision Blizzard Layoffs, Citing It Contradicts Their Merger Intentions

In the aftermath of last week’s colossal 1,900 job losses across Activision Blizzard, Xbox and ZeniMax employers, the Federal Trade Commission (FTC) has started an enquiry targeting the statements made by Microsoft to justify their purchase of Activision Blizzard.

Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court.

Their point is targeting wording from Microsoft’s end where they declared that the acquisition of Activision would result in a framework that allowed the company to operate independently post merger – a statement that now seems moot given that the substantial loss of jobs at the company were part of a larger, Microsoft-driven restructure. Even harder to parse when you consider the proximity to the merger being completed – a paltry couple of months.

the FTC has complained to a federal appeals court about Microsoft's 1,900 Activision Blizzard and Xbox layoffs. The FTC argues the move undermines Microsoft's claims that Activision Blizzard would operate independently https://t.co/d7pQTCpQfn pic.twitter.com/xR2T6VgQwL

— Tom Warren (@tomwarren) February 7, 2024

The letter was filed to U.S. federal appeals court earlier today (originally spotted by The Verge) and makes a concise point regarding the words of Microsoft to the court to justify their buyout, and that the actions taken during the restructure and loss of jobs contradict their initial pleas.

They also make a point that such dramatic changes to the workforce, including the moving of the acquired businesses administrative duties to be centralised within Microsoft’s side of things could also be interpreted as an action to halt the FTC’s ongoing efforts to undo the merger – given that the FTC never formally lowered their stance on blocking the deal from occurring. The loss of staff puts a company like Blizzard in a position where they may not be able to function if Microsoft ownership and administration was reversed.

In the meantime, legal minds across the internet are sharing their thoughts on the matter – with some detailing that the actions of Microsoft may not equate to antitrust depending on how you approach their strategy. As for how this will develop, it is anyone’s guess. Microsoft is clearly in a position to run their acquired businesses as they see fit –the letter has only just reached the appeals court, so a formal response will likely surface eventually.

We will anticipate further comment.

Shoutouts to The Verge.