The US Federal Trade Commission (FTC) has said Microsoft’s decision to make mass layoffs in its gaming division contradicts previous statements it made in court about how it planned to run the Xbox business if it acquired Activision Blizzard.
Following a court victory for Microsoft last year, which the FTC is currently appealing, the technology giant completed its $69 billion acquisition of Activision Blizzard in October 2023.
In a message sent to staff, Xbox boss Phil Spencer said the decision was taken after Microsoft and Activision Blizzard’s leadership teams “set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth”.
In a complaint sent to the 9th US Circuit Court of Appeals on Wednesday (via Bloomberg), the FTC argued that this move was “inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger”.
“Moreover,” it added, “the reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief should the pending administrative proceeding result in a determination that Microsoft’s acquisition of Activision violated Section 7 of the Clayton Act.”