Epic Games Announces Layoffs Of More Than 1000 Employees, Citing “Downturn In Fortnite Engagement”

This morning, Tim Sweeny sent out a notice to employees stating that the company is laying off over 1000 employees at Epic Games and that “major cuts” had to be made in order to “keep the company funded”. He goes on to state that the layoff is only part of the cost-cutting measures, also citing more than “$500 million of identified cost savings in contracting, marketing, and closing some open roles”.

The post states that some of the issues are industry-wide, like slower growth and weaker spending. However, there are issues specific to Epic as well, particularly regarding the company’s big money maker, Fortnite. No, the game is not dying, but it’s not consistently raking in the cash. That said, it seems Sweeny does expect an uptick once the game is nice and settled back onto mobile devices.

Sweeny goes on to discuss what the company will be doing to deal with the current state of things, most of which focuses on the company's free-to-play battle royale, Fortnite. He also emphasizes that none of these layoffs are AI-related. Although, he doesn’t try to say that they’re not making use of AI. At the end, he adds that those impacted by the layoffs will “receive paid coverage for 6 months” and that the company will “accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years”. So, at least those laid off will have something to fall back on while they try to find a new place to land.

Still, it’s rough. And, it’s not unlikely we’ll be seeing similar stories going forward.