After the U.S. Federal Trade Commission (FTC) issued formal criticism of Microsoft's massive layoffs of 1,900 people after the acquisition of Activision Blizzard, Microsoft has now responded, saying that the layoffs "cannot be solely attributed to the merger" and that Activision Blizzard actually had plans to eliminate a large number of jobs before the acquisition was completed.
The FTC previously criticized that because Microsoft needs to eliminate redundant positions after the merger with Activision Blizzard after the acquisition, the company will be prohibited from further divesting new businesses if the regulator deems it necessary. Importantly, Microsoft has previously stated in court that the company will ensure that Activision Blizzard can continue to operate independently after the spin-off "in the unlikely event".
Now in Microsoft's response, the company said that "the FTC's interpretation of the facts is misleading and out of context. Consistent with broader trends in the gaming industry, Activision Blizzard has planned to eliminate a large number of jobs while still operating as an independent company. Therefore, the announcement (announcement of layoffs) cannot be entirely attributed to the merger."
In addition, Microsoft said it "will use all its strength to defend its representation to the court." "While some overlap has been identified and some jobs have been eliminated, Microsoft has structured and operated the combined company in a manner that would allow some or all of Activision Blizzard's businesses to be easily divested and continue to be a strong market player in the unlikely event that it is eventually required to divest," the company said. "This is exactly what Microsoft has stated before."
That said, Microsoft believes that even with all these layoffs, Activision Blizzard can still operate independently, contrary to the FTC's concerns.