Microsoft says that its decision to lay off roughly 1,900 staff in its gaming division did not contradict statements previously made to the FTC and that Activision was already planning a large-scale reduction. Microsoft says in a letter to the FTC, which was forwarded to VGC by its lawyers, that the Federal Trade Commission’s “factual assertions are incomplete and misleading”.
Earlier this week the FTC filed a complaint with the 9th US Circuit Court of Appeals regarding Microsoft’s recently announced job cuts. The complaint follows the FTC’s appeal to the Microsoft Activision merger, which should a court rule in the the FTC’s favor, could potentially have a bearing on the recent layoffs. It claimed that per Bloomberg (via VGC), “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.”
Microsoft further defends its actions
Microsoft also says that in order to get approval from UK regulators it had to make some concessions. These included not getting access to Activision Blizzard’s U.S. cloud streaming rights. A sizeable market to lose out on for sure. It also says that it had to sign a new agreement with Sony keeping the popular Call of Duty franchise available to Sony’s platforms, and per a statement to VGC, was “on even better terms than Sony had before.”
Microsoft also attributes its gaming division staff reduction to broader trends within the gaming industry. Indeed, while things may appear unscrupulous with this move, industry-wide layoffs have been happening since the end of the pandemic. The tech sector continues to see similar announcements, from software and gaming sectors to hardware manufacturers, it seems as if news of job cuts has become increasingly more regular over the last 24 months. The gaming industry has perhaps had the largest amount of media coverage, and one publisher in particular, Embracer Group, appears to have a never-ending swath of layoffs, or studio closure announcements.