Microsoft layoffs at Activision violate merger guarantees, FTC says

The Federal Commerce Fee isn’t pleased with the result of Microsoft’s $68.7 billion acquisition of Activision Blizzard, telling a courtroom on Wednesday that Microsoft’s recent layoffs contradict guarantees it made to get the merger accepted.

In a letter to the clerk of the Ninth Circuit Courtroom of Appeals, the FTC criticized Microsoft for the layoff of 1,900 employees in January, which represented about 8% of its gaming division. The layoffs largely affected employees at Activision Blizzard. The antitrust regulator defined that the layoffs had been “inconsistent with Microsoft’s suggestion to this Courtroom that the 2 firms will function independently post-merger.”

“As we transfer ahead in 2024, the management of Microsoft Gaming and Activision Blizzard is dedicated to aligning on a technique and an execution plan with a sustainable price construction that may assist the entire of our rising enterprise,” Microsoft Gaming chief Phil Spencer mentioned in a memo announcing the layoffs in January. “Collectively, we’ve set priorities, recognized areas of overlap, and ensured that we’re all aligned on the perfect alternatives for development.”

The letter comes two weeks after Sen. Elizabeth Warren, D-Mass., urged the FTC to keep up its agency stance in opposition to the merger.

“Simply 3 months after @Microsoft’s merger with @Activision, 1,900 employees have misplaced their jobs. I warned that this deal would damage employees,” Warren mentioned in a Jan. 25 post on X, previously often called Twitter. “The @FTC ought to sustain the struggle to unwind this merger.”

Microsoft accomplished its acquisition of Activision Blizzard final October after an almost two-year struggle with regulators. The FTC nonetheless hasn’t given up on stopping the blissful marriage, although. In December, it filed an appeal with the Ninth Circuit Court of Appeals to undo the merger, a chance that many authorized specialists say is extremely unlikely.

On condition that it’s nonetheless preventing in opposition to the deal, the FTC concluded in its Wednesday letter that Microsoft’s layoffs of Activision Blizzard workers would make a divestiture tougher ought to the regulator prevail.

This article originally appeared on Gizmodo.