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Microsoft is coming under fire after it laid off more than 1,900 employees from its gaming division.

New Delhi,UPDATED: February 9, 2024 12:16 IST

Microsoft is facing criticism after announcing a significant reduction in the workforce of its gaming division, affecting more than 1,900 employees. The move has raised concerns about antitrust and competition laws following Microsoft’s acquisition of Activision Blizzard.

The US Federal Trade Commission (FTC) expressed concern that these layoffs could impede its ability to take corrective action if the court finds that Microsoft’s acquisition of Activision Blizzard violates antitrust laws. The FTC’s concerns were conveyed in a letter to the US Court of Appeals for the Ninth Circuit, shedding light on the regulatory scrutiny surrounding the tech company, according to Bloomberg.

The layoffs not only affect Activision Blizzard but also Microsoft’s Xbox division and ZeniMax. Phil Spencer, Microsoft’s gaming chief, revealed in late January that around 8 percent of the gaming division’s 22,000 employees would be affected, marking one of the largest rounds of job cuts in the gaming industry during the month.

Prominent figures such as Blizzard president Mike Ybarra and co-founder Allen Adham are among those leaving, signaling significant changes in leadership within the gaming conglomerate. The fallout from the layoffs extends to several departments, including Blizzard’s esports division and subsidiary studio Toys for Bob. Even staff involved in the development of Blizzard’s unreleased survival game, codenamed Odyssey, are affected.

Microsoft defended its decision, citing a strategic reallocation of resources toward projects with greater growth potential. Blizzard spokesperson Andrew Reynolds confirmed Microsoft’s cancellation of the Odyssey project, but assured that efforts will be made to transition affected team members to other projects within Blizzard’s development process.

The timing of these layoffs has raised questions about Microsoft’s commitment to independence from Activision Blizzard after the acquisition. With the FTC closely monitoring and a federal appeals court reviewing the merger, Microsoft reportedly faces a delicate balance between its business goals and regulatory compliance in the gaming industry.

Published by:

Ankita Garg

Published in:

February 9, 2024

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