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The FTC Is Coming For Xbox Again After Its Mass Post-Acquisition Layoffs

They won't let them be.

The US’ Federal Trade Commission (FTC), which is still working on appealing the case it lost against Microsoft’s $69 billion USD acquisition of Activision Blizzard last year, has now filed a new complaint against the company over the recent mass layoffs that saw around 1,900 staff across Xbox, Activision Blizzard and Bethesda let go.

As reported by The Verge, the FTC has complained that these fresh layoffs contradict the company’s promise that the “status quo” pre-merger would be maintained after the fact, and that Activision Blizzard can’t be seen as operating independently as promised if Microsoft is eliminating positions that overlap with its own resources. It now wants the acquisition to be once again put on ice while it completes an antitrust evaluation

Microsoft has since given a statement to Game Developer, saying that the FTC is “ignoring the reality that the deal itself has substantially changed” and that the layoffs at Activision Blizzard specifically were already going to happen.

Yesterday we also learned of some of the Activision Blizzard studios affected by the layoffs, including 86 staff let go and an office closure at an address matching that of Toys For Bob, who are responsible for the Skylanders games as well as Crash Bandicoot 4 and the Spyro Reignited Trilogy, and another 76 staff being let go at Call of Duty developer Sledgehammer Games.

Head of Xbox Phil Spencer’s statement at the time that the mass layoffs at the company were announced read:

“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. 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. Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth.

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“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of the 22,000 people on our team. The Gaming Leadership Team and I are committed to navigating this process as thoughtfully as possible. The people who are directly impacted by these reductions have all played an important part in the success of Activision Blizzard, ZeniMax and the Xbox teams, and they should be proud of everything they’ve accomplished here. We are grateful for all of the creativity, passion and dedication they have brought to our games, our players and our colleagues. We will provide our full support to those who are impacted during the transition, including severance benefits informed by local employment laws. Those whose roles will be impacted will be notified, and we ask that you please treat your departing colleagues with the respect and compassion that is consistent with our values.

“Looking ahead, we’ll continue to invest in areas that will grow our business and support our strategy of bringing more games to more players around the world. Although this is a difficult moment for our team, I’m as confident as ever in your ability to create and nurture the games, stories and worlds that bring players together.

“Phil”