The Federal Trade Commission (FTC) has filed a complaint against Microsoft to the U.S. Court of Appeals for the Ninth Circuit following the news of the company planning to lay off around 1,900 members of staff from across its Xbox, Activision Blizzard, and ZeniMax teams.
Highlighted by The Verge, the letter has alleged that the plan to lay off staff contradicts claims that Microsoft made in court when fighting to acquire Activision Blizzard. The FTC pointed to the memo sent to staff by Phil Spencer when the layoff plans were announced, and stated that his reference to identifying “areas of overlap” is “inconsistent” with the previous suggestions that the companies would “operate independently,” even after the acquisition.
“Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court,” the new filing states. “Specifically, Microsoft reportedly has stated that the layoffs were part of an ‘execution plan’ that would reduce ‘areas of overlap’ between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger.
“Moreover, the reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief should the pending administrative proceeding result in a determination that Microsoft’s acquisition of Activision violated Section 7 of the Clayton Act [an act which prohibits acquisitions which may substantially lessen competition],” it continues. “The reported layoffs thus underscore the FTC’s need for injunctive relief pending completion of the administrative proceeding.”
Before Microsoft’s acquisition of Activision Blizzard went ahead, the FTC had attempted to block proceedings by filing a temporary injunction. This was denied in July 2023, but it lodged an appeal, and in September, attempted to recommence its fight. The merger was officially closed in October.