Microsoft claims Activision was already planning ‘significant’ layoffs before its acquisition, ‘consistent with broader trends in the gaming industry’

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Microsoft has defended claims made by the Federal Trade Commission (FTC) that its plans to lay off around 1,900 members of its gaming staff contradict “representations it made” during the fight to acquire Activision, and stated that Activision was already planning “significant” staff cuts.

In case you missed it, on Wednesday (February 7), the FTC submitted a letter to the U.S. Court of Appeals for the Ninth Circuit, in which it alleged: “Microsoft reportedly has stated that the layoffs were part of an ‘execution plan’ that would reduce ‘areas of overlap’ between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger.”

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Microsoft’s response, submitted to the U.S. Court of Appeals for the Ninth Circuit by Rakesh Kilaru yesterday (February 8), said the FTC’s “factual assertions are incomplete and misleading,” and that the recent layoffs can’t be “attributed fully” to the acquisition. 

“Consistent with broader trends in the gaming industry, Activision was already planning on eliminating a significant number of jobs while still operating as an independent company,” the response states. “The recent announcement thus cannot be attributed fully to the merger. 

“More important, Microsoft continues fully to stand behind its representations to this Court,” it continues. “To be clear, while some overlap was identified and some jobs were eliminated, Microsoft has structured and is operating the post-merger company in a way that will readily enable it to divest any or all of the Activision businesses as robust market participants in the unlikely event that a divestiture ultimately is ordered. This is precisely what Microsoft represented previously.”

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Microsoft’s plans to lay off approximately 1,900 members of staff were revealed last month, and staff across the Xbox, Activision Blizzard and ZeniMax teams are reportedly affected. 

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