Microsoft Responds to FTC’s Claims Regarding Layoffs After Activision Acquisition
Microsoft Corp. (NASDAQ: MSFT) has directly addressed the Federal Trade Commission’s (FTC) claims concerning layoffs following the acquisition of Activision. The FTC criticized Microsoft’s decision to lay off 1,900 employees, stating that it contradicted earlier assurances made during the antitrust trial.
However, Microsoft has responded by stating that Activision had already planned significant job cuts before the merger. The company criticized the FTC’s assertions as “incomplete and misleading.” According to The Verge, Microsoft clarified that “Activision was already planning on eliminating a significant number of jobs while still operating as an independent company.”
The filing also noted that Activision’s pre-existing layoff plans aligned with industry trends impacting the gaming sector. This is consistent with layoffs announced by other gaming companies, such as Sega Sammy Holdings Inc (OTC: SGAMY) and CI Games, reflecting wider industry challenges.
Microsoft had previously explained that the layoffs were a result of identifying overlaps and the need for a sustainable cost structure. This was reiterated in Microsoft Gaming CEO Phil Spencer’s memo accompanying the initial announcement of the layoffs within its gaming department last month.
Furthermore, Microsoft asserted in the court filing its readiness to reverse the acquisition if necessary. While such a scenario is deemed unlikely, the deal allows for divestment from Activision if required.
The FTC’s objections primarily concern antitrust matters rather than workforce protections. It remains to be seen whether the recent layoffs across Activision subsidiaries will affect court approval of the acquisition.
In conclusion, Microsoft has responded to the FTC’s claims regarding layoffs after the Activision acquisition. The company has defended its decision by highlighting Activision’s pre-existing layoff plans and industry challenges. The court will ultimately determine the impact of these layoffs on the acquisition’s approval.
