In the dynamic world of tech, recent events involving Microsoft have sparked significant discussion. As Microsoft implements substantial job cuts and elevates prices, former US Federal Trade Commission (FTC) chair Lina Khan has voiced concerns on X, highlighting that the company’s post-acquisition actions align precisely with the warnings issued by the FTC when it initially opposed the deal. Khan remarked, “Microsoft’s acquisition of Activision has been followed by significant price hikes and layoffs, harming both gamers and developers. As we’ve seen across sectors, increasing market consolidation and increasing prices often go hand-in-hand.” She further underscored the sentiment, stating, “As dominant firms become too-big-to-care, they can make things worse for their customers without having to worry about the consequences.” This unfolding narrative offers a critical look for developers and tech enthusiasts tracking market trends and corporate responsibility.
Unpacking the FTC’s Initial Opposition and Microsoft’s Counterarguments
Long before these recent developments, when Lina Khan led the FTC, the commission vigorously challenged Microsoft’s proposed acquisition of Activision Blizzard. In 2022, the FTC initiated a lawsuit to block the deal, expressing serious concerns that the merger was “reasonably likely to substantially lessen competition and/or tend to create a monopoly in both well-developed and new, burgeoning markets.” Contrary to these warnings, both Microsoft and Activision asserted the merger would have a positive impact. Bobby Kotick, then CEO of Activision Blizzard, publicly stated in July 2023 that the deal was poised to “benefit consumers and workers” and “enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”
The Post-Acquisition Reality: A Timeline of Layoffs and Price Escalations
The highly anticipated deal was finalized in October 2023, and the implications for both the industry and its workforce began to surface with startling speed. Within mere months of the acquisition’s sealing, Microsoft initiated a massive wave of layoffs, impacting 1,900 workers across Activision Blizzard and Xbox, alongside the cancellation of a much-anticipated survival game. This was tragically followed by another round of job cuts in September 2024, affecting an additional 650 employees. The most profound cuts occurred in July 2025, when Microsoft let go of 9,000 more employees across various divisions, resulting in multiple game cancellations and the closure of The Initiative studio. This grim period unfolded even as Xbox head Phil Spencer asserted that the company’s gaming business “never looked stronger.”
Beyond the human cost of job losses, consumers have also faced the burden of escalating expenses. Subscribers to Game Pass Ultimate and PC Game Pass witnessed a significant price hike, notably the second such increase since the Activision Blizzard deal was concluded. The FTC had previously criticized the initial, albeit smaller, price adjustment in July 2024, underscoring a pattern of rising costs post-merger.
Lina Khan’s Prescient Warnings Confirmed
While Lina Khan concluded her tenure as chair of the FTC in January 2025, meaning her recent observations on X carry no official regulatory influence, the subsequent unfolding of events speaks volumes. The consistent pattern of layoffs and escalating prices following the Microsoft-Activision acquisition provides a stark validation of the concerns she and the FTC raised. For developers and tech enthusiasts alike, this narrative serves as a potent reminder of the broader market implications when consolidation goes unchecked, emphasizing the importance of informed decision-making in navigating the ever-evolving tech landscape.
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