The Federal Trade Commission (FTC) raised concerns regarding the recent layoffs at Microsoft that affected 1900 employees across its gaming division. Read on to learn more about the situation and the contents of the court notice.
FTC Raises Concerns Over Microsoft Layoffs
Seeks to Temporarily Pause Microsoft's Acquisition of ActiBlizz
The FTC filed a court notice to the US Court of Appeals on February 7, arguing that Microsoft had contradicted the representations it made during its court battle to acquire Activision Blizzard. This was prompted by Microsoft's recent layoff of 1,900 employees in its video games division, including those in the newly-acquired Activision Blizzard units.
According to the FTC, Microsoft's reported statement attributing the layoffs to an "execution plan" that would "reduce areas of overlaps between Microsoft and Activision" was inconsistent with Microsoft's previous suggestion to the Court that the two companies will operate independently following the merger.
Counsel for the FTC Imad D. Abyad wrote to the Court, "The Federal Trade Commission (FTC) writes to notify the Court of Microsoft’s publicly reported plan to eliminate 1,900 jobs in its video game division. This newly-revealed information contradicts Microsoft’s representations in this proceeding, which seeks to temporarily pause Microsoft’s acquisition of Activision pending the FTC’s evaluation of the merger’s antitrust merits."
"Moreover, the reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief should the pending administrative proceedings result in a determination that Microsoft’s acquisition of Activision violated Section 7 of the Clayton Act. The reported layoffs thus underscore the FTC’s need for injunctive relief pending completion of the administrative proceeding," FTC further added in the court notice.
The layoffs which affected employees across Xbox, Zenimax, and Blizzard, also saw departures of high-ranking executives, including Blizzard President Mike Ybarra and Blizzard Chief Design Officer Allen Adham.
Gaming Industry Layoff Trend Continues
2K's Visual Concepts Affected by Layoffs
In related news, the gaming industry's layoff trend continues with Take-Two Interactive's 2K Games reportedly laying off an undetermined number of developers at NBA 2K studio Visual Concepts. Industry leaders said that this trend of job losses will persist into 2024 and possibly beyond, citing factors such as high-interest rates, an abundance of new releases, and cautious investors.
Along with Visual Concepts and Blizzard, studios impacted by layoffs recently include Borderlands developer Gearbox, Unity on its fourth round of layoffs, Lords of the Fallen's CI Games, Dead by Daylight Devs Behaviour Interactive, and Cult of the Lamb publisher Devolver Digital which also saw the departure of its CEO.
Moreover, Embracer Group exacted layoffs along with the cancellation of a Deus Ex sequel, and LoL devs Riot Games amid the restructuring of its business strategies.
Source:
FTC court notice to the U.S. Court of Appeals for the Ninth Circuit
US FTC FILES COURT NOTICE AGAINST MICROSOFT LAYING OFF ACTIVISION EMPLOYEES
Another Round Of Layoffs Hits 2K Games
