Last Updated: February 09, 2024, 14:05 IST
Redmond, Washington State, USA
Microsoft bought Activision to bolster its gaming business
Microsoft completed the deal to bolster its gaming business but Activision Blizzard has seen most of its staff leave the merged entity.
Microsoft finally got the nod to acquire Activision Blizzard but the company decided to cull thousands of employees from the gaming division to accommodate the changes. Microsoft is now facing questions about its decision to lay off around 1,900 employees which is something that antitrust regulators had feared while giving the deal the nod to go ahead.
The concerns have been shared by the US Federal Trade Commission (FTC) who feel that Microsoft is making drastic changes to the newly acquired company which can have a big impact on the future of the business as well as thousands of employees losing their jobs.
The decision to churn employees also has a big impact on the senior people who come from the Activision Blizzard team, along with a core team that has been working on future projects for the gaming giant. Microsoft has reportedly cited business decisions as the reason for these layoffs and the need to reallocate resources into projects that have a higher growth potential in the future.
The regulators are undoubtedly concerned with the timing of these layoffs right after the deal has gone through. Having said that, Microsoft isn’t the lone tech giant churning employees in recent times. Google, Meta, Amazon and more tech companies have been on a layoff spree over the past few months, and the warning from most of these brands suggest more layoffs are expected throughout 2024 as they realign their company strategy with AI in the mix.
The Microsoft-Activision deal might have been cleared by it seems the FTC will be keeping a close on the developments at the merged entity and any possible red flag could pose issues in the future for the companies.
