Feds Say Activision Layoffs Violate Promises Microsoft Made in Merger Deal

The Federal Trade Commission isn't happy with the outcome of Microsoft's $68.7 billion acquisition of Activision Blizzard, telling a court on Wednesday that Microsoft's recent layoffs contradict promises it made to get the merger approved. From a report: In a letter to the clerk of the Ninth Circuit Court of Appeals, the FTC criticized Microsoft for the layoff of 1,900 workers in January, which represented about 8% of its gaming division. The layoffs largely affected employees at Activision Blizzard. The antitrust regulator explained that the layoffs were "inconsistent with Microsoft's suggestion to this Court that the two companies will operate independently post-merger."

"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," Microsoft Gaming chief Phil Spencer said in a memo announcing the layoffs in January. "Together, we've set priorities, identified areas of overlap, and ensured that we're all aligned on the best opportunities for growth." The letter comes two weeks after Sen. Elizabeth Warren, D-Massachusetts, urged the FTC to maintain its firm stance against the merger.

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