Microsoft Says Activision Was Already Planning Layoffs Following Complaints From the FTC - News
by William D'Angelo , posted on 01 March 2024 / 4,620 Views
The US Federal Trade Commission (FTC) has sent a complaint to the 9th US Circuit Court of Appeals this week over Microsoft laying off 1,900 employees at its gaming division. The layoffs are primarily at Activision Blizzard, however, some at Xbox Game Studios and Bethesda/ZeniMax will also be impacted.
"The reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief," reads a letter from the FTC (via Bloomberg).
The FTC stated "the layoffs show that the merger created areas of overlap and the court should have paused Microsoft’s integration of the two companies while the agency completes its in-house trial," according to the report from Bloomberg.
Microsoft has sent a letter to VideoGamesChronicle saying Activision Blizzard was already planning on making large scale layoffs even if the acquisition was not approved.
"Consistent with broader trends in the gaming industry, Activision was already planning on eliminating a significant number of jobs while still operating as an independent company," said Microsoft. "The recent announcement thus cannot be attributed fully to the merger."
A Microsoft spokesperson added, "In continuing its opposition to the deal, the FTC ignores the reality that the deal itself has substantially changed.
"Since the FTC lost in court last July, Microsoft was required by the UK competition authority to restructure the acquisition globally and therefore did not acquire the cloud streaming rights to Activision Blizzard games in the United States.
"Additionally, Sony and Microsoft signed a binding agreement to keep Call of Duty on PlayStation on even better terms than Sony had before."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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Bullshit.
I'm not sure why some think ABK wouldn't have layoffs if the merger didn't happen. Would certain positions not have been effected if the merger didnt happen? Of course, overlap positions. If the deal ended up dead, stocks would have dropped significantly causing layoffs. Even if the deal didn't happen, layoffs were very likely. ABK hired 7,000 employees since 2022 going from 10,000 to 17,000. There is no way they wouldn't have been effected, especially with lack luster performance from games like Overwatch 2.
ABK is in a downward spiral and large layoffs were coming regardless of whether Microsoft bought them, Microsoft got suckered in to paying a high price for them during the covid gaming craze
they bought Blizzard and then Blizzard cancels their next game, Blizzard is in rough shape worse than the other parts
Possibly. But there is also the possibility it pays off big for them.
for sure, the console war hurts Microsoft, I have Sony friends that just hate on Xbox all the time for no reason
if Microsoft is third party, they will start to buy Xbox games and maybe there is a brighter future here, no more console wars might be good for Microsoft, they just want to make money making games
Microsoft is not a good hardware company, but an amazing software company
I'm certainly not against the idea of Xbox bringing more of their games going on other platforms. It would also be nice if Sony and Nintendo also did this as well and you only needed to buy 1 peice of hardware to play everything. Unfortunately console wars won't go away with just Xbox being 3rd party. Sony and Nintendo fanboys will keep doing their thing.
if Microsoft releases their Xbox controller for PS5, that would be cool, I'm ready to leave the Xbox for good
I still prefer the Xbox because they seem to offer the more seemless ecosystem and consumer friendly experience in ways compared to other consoles. I enjoy how they implemented backwards/forward compatibility with devices and backwards compatibility in general with games. Also, Game Pass is awesome. But that's why it would be great to be able to buy the preferred hardware and play everything. If I could just stick with one system, I would but if they port everything to Ps5, I would get a ps5.
It's a preference thing. They are such similar systems, it's always funny when I see one group of people hating on a console that is identical to the one they love.
It is. I mainly got ps5 for final fantasy lol 🤣 and ragnarok
"they bought Blizzard and then Blizzard cancels their next game, Blizzard is in rough shape worse than the other parts"
You make it sound like Blizzard waited for MS to buy them to then cancel the game and not like MS forced Blizzard to cancel the game... Which is way more likely as MS are the one in charge.
Regarding software, well doing office software and games it's not the same thing. MS has been ok but far from amazing in those last years on making games. They haven't shown much creativity.
If they don't turn things around they might manage to get big sales numbers thanks to COD but not become the kind of company to get GOTYs.
They haven't even been known for being very good at managing the license/gaming company they buy.
I wouldn't even be surprised that if some of their games lose the aura that comes from being a console exclusive they actually may not do that well long-term because they are not that great. and benefit from a lot of media attention because of their exclusivity status.
A lot of Sega's licenses lost a lot of popularity after Sega stopped being a console maker.
they did wait until microsoft bought it before cancelling because they didn't want the drama of layoffs before the sale went through, it took several years
i do agree if you are not an exclusive, it can hurt sales, but Microsoft decided that the lower install base in this game is the problem
MS trying to pretend the layoffs would be basically the same without the merger is ridiculous when even themselves said that most of the layoffs were redundancies (that wouldn't exist without the merger).
Yea this statement doesn't make sense.
No where did Microsoft promise no layoffs, the FTC complaint is groundless, they are trying to twist Xbox's words that "they could be run independently" to "no redundancies will be found and no one will be fired" which is not what MS promised
Expect they did not say that, maybe you should take the time to read and inform yourself before to respond something like that:
“Consistent with broader trends in the gaming industry, Activision was already planning on eliminating a significant number of jobs while still operating as an independent company,” Microsoft told a federal appeals court in San Francisco. “The recent announcement thus cannot be attributed fully to the merger.”
They never said it would be the same...
What's ridiculous is to transform what they said into a "MS trying to pretend the layoffs would be basically the same without the merger"; because clearly, they did not say that.
Did you read the article? The problem is this bit in Phil's communiqué: "Together, we’ve set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth."
They told the judge that Microsoft would operate and structure ABK as if the merger could be overturned by the pending final ruling. Meaning they really can't fire overlapping positions or the ones needed for ABK's regular operations.. They just had to wait three months and they couldn't which is appalling.
Did you read my comment? My response here had nothing to do with what they promised before or how they handled it and I’m not really going to argue about that anyway as Microsoft never promised that per say, but again, not at all related to my point.
There a difference between saying that Microsoft said it would be the same without the acquisition and saying that it is not fully because of it (the layoffs)
Microsoft never pretended that the numbers of people let go would be the same without the acquisition like DanFarrari is saying and calling it ridiculous.
I think you don't understand the very basic foundation and logic of the issue which is "overlapping" staff and the fact that it would be necessary if both companies were to part ways because of the last remaining appeal. Microsoft can fire whoever they want except the staff necessary for running the company. If the reasoning for firing them is "overlapping" then you'd still need that staff for running the company if the merger didn't go through.
I hope this helps.
No it does not help at all as you clearly mixing up things.
I can see that you are VERY frustrated for those people that got fired that you have nothing to do about and because this is the internet you need to be very offended about it and need to bring everything you understood by reading about it in every comment even if the comment is not about that specifically. Good for you.
But again, my response here had nothing to do with that. Simple as that and you just mix everything together because you are offended by this whole thing altogether which does not help at all. In this response at least, I am, not even arguing about is it right or wrong, or did Microsoft could have done things differently, you are the only one bringing this and arguing with a wall...
Like I said, THIS comment three is about Microsoft saying that all layoffs where not all related to the acquisition versus saying that they were NOT AT ALL related to the acquisition. Nothing else, you are the one mixing up other things here. And talking about stuff that is not really making any difference about this topic. You can reply, I will just ignore you cause clearly you will keep blabbering about "your" topic anyway.
Dude, calm down. I'm not offended in the slightest. What I am is laughing my ass off at the utter incompetence that Microsoft is showing every other day around Xbox.
It's you who's white knighting as hard as you can since in your frenzy you didn't even read the first comment you were answering to properly.
You even went as far as downvoting me. Chill.
Wow a downvote, can you imagine how far this went ? :)
Then don't add this kind of stuff at the end of your comment if you want to have a nice conversation then: "I hope this helps." and talk to me like I'm a child that do not understand basic concepts. I'm playing the same game, so I'm not blaming you, but don't come here telling me that I should be nice now and that I should "chill". I'm perfectly fine and clicking on that downvote did not require me to be "not" chill or mad or anything, just a clic ... :)
And this is LITERRALY the first comment I'm responding to:
"MS trying to pretend the layoffs would be basically the same without the merger is ridiculous when even themselves said that most of the layoffs were redundancies (that wouldn't exist without the merger)."
Which CLEARLY is pretending that Microsoft IS claiming that layoffs would be the SAME without the acquisition... And I STATED that it was not the case, Microsoft NEVER said that. And that's all; that the WHOLE point I made, nothing else.
And you responded and went on a crusade about how Microsoft should not have done that, or could have handled later or differently and blah blah blah, came up with all your other topics about the actual article that had nothing to do with my response/reaction or the comment I'm responding to. You decided to make it about something else, this is has nothing to do with me not reading it, it has to do with you deciding that it should be about something else.
Cost of making games is high and without them performing well it is a done deal with these layoffs
Nobody does corporate bullshit-speak like Microsoft.
Haha, typical beyond pathetic Corporate PR to stroke the corporate bobble-headed boot lickers.
ok ok microsoft
Makes sense, the gaming industry is incredibly volatile right now with record layoffs across the whole industry (1 month into 2024 we had more than half the layoffs of all 12 months of 2023 combined), and CoD MW3 just performed under expectations, so I think there would have been layoffs at ABK regardless of the acquisition. If the acquisition had been shot down by the regulators Activision's stock price would have tanked, leading to layoffs as well. These layoffs were happening no matter what I think.
I remember reading that the average layoffs in the wake of an acquisition are 30% of the workforce, so Microsoft Gaming laying off 9% of their workforce after an acquisition is actually well under the average layoffs in a situation like this.
They are not finished. It will take a few years before the full extent of layoffs owed to the acquisition have occurred.
No, it doesn't. One of the conditions for the provisional merger was that ABK should be able to operate normally if the merger didn't go through in the last appeal. Firing overlapping positions is an infringement of that condition.
They just had to wait three more months, which is pocket money for Microsoft, or not word it like that, which seems rocket science for these guys. I dunno which is worse.
I do not think you understand how businesses works and what are the obligations to the shareholders if you think that this if pocket money and that they could have waited. It is definitely not how it works even if those articles from very concerned and offended ‘journalists’ present it that way.
That's why I gave the option not to make fools of themselves by confessing to the murder. This looks like a cheap lawyer TV drama.
Doesn't Microsoft have over 220,000 employees? Why aren't people praising them for that amount of work given. Crazy, they lose 10k, people complain, they rehire 10k down the road, no one cares. Make it make sense.
MS are the richest company in the world (again, congrats to them) they aren't even in the top 30 employers in the world. They can afford 1900 extra people.
However, this doesn't feel like it is an 'afford' thing, it's cutting fat. Bet you there were like 1800 middle managers or worse "project managers" in this, no one wants those.
Companies cull 5% to 10% of their bottom performers yearly. I know, i work in one.
Why fire them, though? I mean, Microsoft is bleeding money with Xbox and 1900 jobs at $80K a year is $152M. Are they really that cheap not to avoid flak from the media and trouble with the FTC by keeping them on their payroll?
It doesn't matter that ABK had the layoffs planned. The problem is Microsoft's big mouth trying to please media outlets saying that were overlapping jobs.
I swear they actively look for PR disasters. What a bunch of torpid corpo ghouls.
Well, MS have always been a bunch of contrarians. Their fan base are as deluded as Apple's, personal identification stemming from a brand is funny.
https://www.youtube.com/watch?v=06QXMjLdky4
The video explains the fan base well. Personally, people should just call out the mediocrity the company massively exemplifies.
Do you have selective memory? I have seen plenty of Xbox fans share their displeasure with certain decisions MS have made over the years because there has been plenty of them. Not everyone is on the, hate everything MS bandwagon, like you are because not everything they do is worth hating on.
