Microsoft: Activision Blizzard planned major layoffs even before the merger
Microsoft Corporation has responded to a complaint from the US Federal Trade Commission (FTC) about layoffs in its gaming division, a significant part of which falls on Activision Blizzard. She said that Activision Blizzard was already preparing to cut staff.
"In line with global trends in the gaming industry, Activision planned to reduce a significant number of employees when it was still an independent company," Microsoft said in a statement sent to the U.S. Court of Appeals. "Therefore, the recent announcement [of layoffs at Microsoft's gaming division] cannot be fully explained by the merger."
Microsoft added that although it is firing a number of employees whose work responsibilities overlap, the corporation manages Activision Blizzard in such a way that it can be easily removed from Microsoft if required by the court.
Journalist Stephen Totilo believes that Microsoft's argument about Activision Blizzard's plans to make cuts sounds "plausible." He noted that in recent years, Activision Blizzard's staff has grown significantly — from 9.8 thousand people at the end of 2021 to 13 thousand at the end of 2022. However, in 2023, the company began to "fall short of growth targets", which could make it think about layoffs.
Recall that the FTC appealed to the Court of Appeals on February 7, 2023. In its complaint, the agency said that Microsoft's decision to lay off 1,900 employees of the gaming division contradicts its promises that Activision Blizzard will continue to operate independently after the merger is completed.
Earlier in the reporting documents, Activision Blizzard announced that during the layoffs it would part with 899 employees from its divisions in California. In particular, employees of Blizzard Entertainment, Toys For Bob, Infinity Ward and Sledgehammer Games will fall under the cuts.