Microsoft has denied claims by US regulators that it went back on its word by cutting jobs after its purchase of Activision Blizzard – the biggest gaming deal in history.
Microsoft Gaming announced 1,900 job cuts in January, three months after the $69bn (£56bn) purchase was completed. The Federal Trade Commission (FTC) says that “contradicts” Microsoft's previous representations.
But Microsoft said the idea of job cuts did not originate with its takeover.
“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,” the firm said in a filing with the US court, seen by the BBC.
“The recent announcement thus cannot be attributed fully to the merger.” The controversial deal gives Microsoft control of popular games such as Call of Duty, World of Warcraft and Candy Crush. It was initially blocked in the UK but was later approved when Microsoft made concessions.
The FTC, however, is still asking for the Court of Appeals to halt the deal so it can consider anti-trust implications. If the regulator wins its case, it could still approve the merger but it might decide to split Activision Blizzard up into separate entities, or even block it entirely.
Because of this, it said the layoffs would make it harder for it to reverse the merger if it won its legal case which it said “underscored the need” for an injunction now.
‘Inconsistent'
The FTC said the reasons given for the layoffs were “inconsistent” with previous statements made by Microsoft.
According to the regulator, the tech giant said that it would run Activision Blizzard as an independent company. But the job cuts by Microsoft indicate that the gaming company is not being run independently, said the FTC.
But Microsoft said it “continues fully to stand behind” the statements it previously made to the court. Phil Spencer, chief executive of Microsoft Gaming, had previously said in a memo that the layoffs were a way to reduce “areas of overlap” in its business.
Separately, there are reports Microsoft is planning a wider shake-up of its gaming operations, including suggestions Xbox exclusives might end up on rival platforms.
In response, Mr Spencer has announced a “business update event” in the coming week to discuss “the future of Xbox”..
— CutC by bbc.com
