Microsoft’s Assertive Stance
Microsoft Corp. MSFT has directly responded to the Federal Trade Commission’s (FTC) claims regarding layoffs following the acquisition of Activision.
FTC Criticism and Microsoft’s Counterargument
The rift ignited when the FTC condemned Microsoft’s 1,900 layoffs, contending that they clashed with earlier promises made during the antitrust trial.
In a rejoinder, Microsoft vehemently maintained that Activision had already strategized substantial job cuts before the merger, castigating the FTC’s claims as “incomplete and misleading,” The Verge reported.
Pre-existing Plans and Industry Norms
Microsoft clarified that “Activision was already planning on eliminating a significant number of jobs while still operating as an independent company.”
The official filing also underscored that Activision’s pre-existing layoff blueprints aligned with industry fluctuations impacting the gaming sector. This sentiment resonates with downsizings declared by other gaming entities, such as Sega Sammy Holdings Inc SGAMY and CI Games, reflecting broader industry challenges.
Microsoft’s Defense
Microsoft had formerly attributed the layoffs to identifying redundancies and the necessity for a sustainable cost structure. This rationale was echoed in Microsoft Gaming CEO Phil Spencer’s note accompanying the initial disclosure of the company’s 1,900 layoffs within its gaming department the previous month.
Moreover, the tech behemoth affirmed in the court filing its willingness to reverse the acquisition. As per Game Rant, a company representative elucidated that the deal allows for divestment from Activision if necessary, although such an outcome is deemed improbable.
FTC’s Antitrust Concerns and Industry Impact
The FTC’s objections primarily center on antitrust issues rather than worker safeguards, raising doubts on whether recent layoffs across Activision subsidiaries could influence court approval of the acquisition.
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