Epic Games Announces Major Layoffs Amid Fortnite Engagement Decline
Epic Games, the developer behind the popular online game Fortnite, has announced it will be laying off more than 1,000 employees. The decision comes as the company experiences a decline in player engagement with Fortnite.
In a message addressed to staff on Tuesday, Epic's CEO Tim Sweeney expressed regret over the layoffs and attributed them to a "downturn" in Fortnite engagement starting in 2025.
"This has left us spending significantly more than we're making," Sweeney said, "and needing to make major cuts to keep the company funded."
Recently, Epic increased the price of Fortnite's in-game currency, V-Bucks, as a measure to "help pay the bills" amid rising operational expenses.
Sweeney's note, which was published on Epic's website, indicated that the layoffs, combined with $500 million in cost savings identified across other areas of the company, are intended to place Epic in a "more stable place."
He further explained that Epic is confronting industry-wide challenges such as slowed growth, reduced consumer spending, and heightened competition for user engagement from other media platforms.
However, Sweeney also acknowledged that Epic faces "unique" difficulties despite Fortnite's ongoing popularity.
"Among these are delivering consistent Fortnite magic with every season and a full mobile experience for smartphone users," he said, referencing the company's prolonged legal disputes with Apple and Google over app marketplace access.
"In being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers," Sweeney added.
Addressing potential speculation regarding the influence of generative AI on the layoffs, Sweeney clarified the company's position.
"Since it's a thing now, I should note that the layoffs aren't related to AI," he stated. "To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can."
This marks the second significant round of layoffs at Epic Games in recent years. In September 2023, the company announced it would cut 830 jobs, representing approximately 16% of its workforce, citing similar operational challenges.
"I'm sorry we're here again," Sweeney told Epic employees in his latest note.
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