Microsoft completed its $69 billion acquisition of Activision Blizzard in October, though life under new ownership has got off to a rough start for the latter. Last month, Microsoft announced that it was cutting 1,900 jobs across its entire gaming division, with Activision Blizzard, Bethesda, and Xbox all set to be impacted.
In the wake of the news of mass layoffs, the United States’ Federal Trade Commission (FTC) – which tried to have the acquisition blocked due to competition concerns prior to its approval – filed a complaint with the 9th US Circuit Court of Appeals earlier this week, saying that the layoffs are “inconsistent with Microsoft’s suggestion that the two companies will operate independently post-merger”.
In response to the FTC’s fresh complaint, Microsoft has sent a letter to the court (via VGC), in which it has claimed that, as has been the unfortunate trend in the games industry for several months running, Activision Blizzard was planning on making “significant cuts” anyway, regardless of whether or not its deal with Microsoft had gone through.
“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 company said. “The recent announcement thus cannot be attributed fully to the merger.”
As part of Microsoft’s mass layoffs, it has emerged that Blizzard Entertainment ended up cancelling its unannounced survival game after six years in development, while it was recently reported that Call of Duty developer Sledgehammer Games and Crash Bandicoot and Spyro studio Toys for Bob had also let go significant portions of their respective workforces.
The games industry’s wave ongoing wave of layoffs has been a devastating one. Over the course of 2023, more than 6,000 people in the industry lost their jobs, and thus far, 2024 has been significantly more damaging, with over 6,300 job cuts already, less than six weeks into the year. Layoffs have been announced at a number of companies, including Riot Games, Unity, Sega, Behaviour Interactive, Lost Boys Interactive, Black Forest Games, CI Games, Thunderful Group, Visual Concepts, and People Can Fly, among others.