Microsoft Under US SEC Scanner Over Layoff Of 1,900 Jobs From Activision Blizzard

Microsoft finds itself under scrutiny for its decision to reduce its workforce in the video game sector. This move appears to contradict earlier assurances made by the tech giant regarding the independence of its newly acquired subsidiary, Activision Blizzard, according to statements by the US Federal Trade Commission (FTC) on Wednesday.

As reported by Bloomberg, the FTC expressed concern that the elimination of approximately 1,900 jobs from Microsoft’s gaming division could potentially hinder the agency’s ability to enforce any necessary corrective measures should a court determine that Microsoft’s acquisition of Activision Blizzard violates antitrust laws. This assertion was made in a letter addressed to the 9th US Circuit Court of Appeals.

The FTC had previously attempted to block the merger between Microsoft and Activision Blizzard, but its efforts were unsuccessful as a federal judge ruled in favour of allowing the merger to proceed. Currently, the case is under review by the federal appeals court in San Francisco.

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One Of The Largest Job Cuts In Gaming

The decision to downsize the workforce came to light in late January, when Phil Spencer, Microsoft’s gaming chief, announced that approximately 8 per cent of the gaming division’s 22,000 employees would be affected.

These layoffs, affecting not only Activision Blizzard but also Microsoft’s Xbox division and ZeniMax, acquired in 2021, marked one of the largest rounds of job cuts in the gaming industry for that month. Notable departures from the leadership included Blizzard President Mike Ybarra and co-founder Allen Adham, who served as chief design officer.

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The impact of the job cuts extended across various departments within Activision Blizzard, including Blizzard’s esports division and its subsidiary studio Toys for Bob. Furthermore, personnel associated with the development of Blizzard’s unreleased survival game, known internally as Odyssey, were among those let go.

Blizzard spokesman Andrew Reynolds stated that Microsoft had opted to cancel the game to redirect resources towards projects deemed more promising for future growth. He also mentioned plans to transition some team members to other projects currently in the early stages of development within Blizzard.