Microsoft is refuting allegations from US regulators regarding its alleged breach of promises following the acquisition of Activision Blizzard, the largest gaming deal in history. The company, facing criticism after announcing 1,900 job cuts in January, contends that the decision to reduce the workforce was not a result of the takeover but rather aligned with pre-existing plans by Activision to cut jobs even before the merger.
The Federal Trade Commission (FTC) asserts that Microsoft's recent actions contradict its earlier representations, maintaining that the job cuts undermine Microsoft's commitment to running Activision Blizzard independently. The FTC, which initially opposed the $69 billion acquisition in the UK but later granted approval with concessions, is now seeking a Court of Appeals intervention to examine potential antitrust implications.
Microsoft insists that the layoffs were part of broader industry trends and were not solely driven by the merger. The deal grants Microsoft control over popular titles such as Call of Duty, World of Warcraft, and Candy Crush. Despite the UK approval, the FTC's push for an injunction suggests that the merger may face further scrutiny or potential restructuring.
The FTC argues that Microsoft's justifications for the layoffs are inconsistent with its previous statements. While Microsoft assured that it would operate Activision Blizzard independently, the job cuts signal otherwise, according to the regulatory body. Microsoft, however, stands by its earlier court statements.
In response to the ongoing controversy, Microsoft's CEO of Gaming, Phil Spencer, emphasized that the job cuts were aimed at reducing overlaps within the business. Additionally, there are reports of a broader restructuring within Microsoft's gaming operations, raising speculations about Xbox exclusives appearing on rival platforms. To address these concerns, Spencer has announced a forthcoming "business update event" focused on discussing the future of Xbox.
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