Microsoft's Acquisition of Activision Under Fire from FTC Amid Mass Layoffs

The US Federal Trade Commission has alleged that Microsoft's recent layoffs at Activision Blizzard contradict the company's initial intentions for the acquisition. In a letter to the US Court of Appeals, FTC lawyer Imad Abyad pointed out that Microsoft had stated its intention to operate Activision as a limited-integration studio, yet the company laid off nearly 1,900 employees from its games division in January. Abyad argued that this move is inconsistent with Microsoft's claim that the two companies would operate independently after the merger. He cited comments from Xbox head Phil Spencer, who stated that the layoffs were intended to eliminate areas of overlap between the companies. The FTC claims that the layoffs highlight the need for injunctive relief to reverse the completed deal. Microsoft has since responded, stating that Activision was already planning to make significant job cuts, regardless of the acquisition's outcome. The company argued that the layoffs cannot be attributed solely to the merger, citing broader trends in the gaming industry.