The FTC isn’t too happy with Microsoft’s Activision Blizzard layoffs
Microsoft reneged on promises it made in court during its Federal Trade Commission (FTC) antitrust trial in 2023 by laying off 1,900 employees in late January, according to the FTC. FTC lawyer Imad Abyad filed a letter with the U.S. Court of Appeals for the Ninth Circuit on Wednesday, effectively telling on Microsoft. “This newly-revealed information contradicts Microsoft’s representations in this proceeding,” the FTC lawyer wrote.
Microsoft announced on Jan. 15 that it was laying off 1,900 workers from its gaming division — around 8% of that part of the company. A large portion of those layoffs were at the newly acquired Activision Blizzard. The percentage of Activision Blizzard layoffs has not been made public, but at least 899 of that 1,900 worked out of Activision Blizzard’s California offices, according to public records.
“As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business,” CEO Phil Spencer said at the time. “Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.”
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The problem with that, Abyad wrote, is that Microsoft told the court during its FTC hearings that Microsoft and Activision Blizzard would be largely independent from each other. He then provided several examples of places where Microsoft said the “post-merger company will be structured and operated in a way that would readily enable Microsoft to divest any or all of the Activision businesses” — that is, that Activision Blizzard would remain independent.
The FTC lawyer also cited in the letter Microsoft’s intention “to maintain the pre-merger status quo” with its “vertical acquisition of Activision,” specifically contrasted with a horizontal merger, where companies often “eliminate redundancies.” Abyad’s point is that Microsoft’s
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