The US Federal Trade Commission has criticized Microsoft over recent layoffs at its game studios.
Last month, Microsoft announced it would be laying off 1,900 developers from its global workforce, impacting those at studios the technology giant owned. This included layoffs at Activision Blizzard, which Microsoft finalized the purchase of last year in October 2023.
The FTC believes Microsoft laying off developers at Activision Blizzard contradicts its past messaging, from before it acquired the studio. As reported by Bloomberg, the FTC has filed a letter with the 9th US Circuit Court of Appeals calling into question Microsoft's previous statements that Activision Blizzard would operate independently should it be acquired by Microsoft.
Microsoft previously said that the layoffs would reduce "areas of overlap" between itself and Activision Blizzard. This, the FTC highlights, is what's chiefly inconsistent with Microsoft previously claiming that Activision Blizzard would operate independently post-acquisition.
"The reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief," the FTC stated in the letter, in the case of a court theoretically finding Microsoft's acquisition of Activision Blizzard illegal later on.
The layoffs at Activision Blizzard are now continuing, and just earlier this week, Crash Bandicoot and Spyro studio Toys For Bob was hit with cuts, with a reported 86 developers laid off at the studio. Despite reports to the contrary, it appears Toys For Bob isn't shutting down entirely, and will now operate entirely remotely, after its California-based studio was shuttered.
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