2 months ago
Epic Games has announced sweeping layoffs of much than 1,000 employees. “The downturn successful Fortnite engagement that started successful 2025 intends we're spending importantly much than we're making, and we person to make awesome cuts to support nan institution funded,” CEO Tim Sweeney said successful a memo to workers connected Tuesday.
Sweeney wrote that, mixed pinch “over $500 cardinal of identified costs savings successful contracting, marketing, and closing immoderate unfastened roles,” nan layoffs will springiness Epic much stability. He added that nan layoffs are not related to AI.
Back successful 2023, Epic laid disconnected 830 employees. At nan time, that was 16 percent of its workforce, suggesting astir 4,000 labor remained astatine nan company. If those numbers haven’t changed excessively overmuch successful nan meantime, that intends Epic is culling astir a 4th of its headcount this week.
Along pinch a dip successful Fortnite engagement, Sweeney pointed retired that Epic isn’t immune from systemic issues nan games manufacture is contending with, specified arsenic a slowdown successful growth, reduced spending, “tougher costs economics” and a conflict pinch different types of media for consumer’s attention.
However, Epic has immoderate issues of its ain to woody with. “Despite Fortnite remaining 1 of nan astir successful games successful nan world, we’ve had challenges delivering accordant Fortnite magic pinch each season; we're only successful nan early stages of returning to mobile and optimizing Fortnite for nan world's billions of smartphones; and successful being nan industry's vanguard we person taken a batch of bullets successful a conflict which is only successful nan early days of paying disconnected for ourselves and each developers,” Sweeney wrote. (He previously said Epic spent complete $100 cardinal successful ineligible fees unsocial connected its App Store conflict pinch Apple.)
The way guardant for nan company, per its CEO, is to create “awesome Fortnite experiences pinch caller seasonal content, gameplay, communicative and unrecorded events,” possibly successful an effort to recapture immoderate of that “magic” he’s referring to. Speeding up activity connected developer devices amid nan modulation to Unreal Engine 6 is important arsenic well, Sweeney indicated.
He said that nan workers Epic is laying disconnected will person astatine slightest 4 months of their guidelines pay, though they’ll get much depending connected nan magnitude of their tenure astatine nan company. Epic will salary for extended healthcare coverage, including for six months for affected workers successful nan US. The institution — which is not publically traded — will velocity up nan vesting of banal options done adjacent January and “extend equity workout options for up to 2 years,” Sweeney said.
Epic announced nan layoffs days aft it increased nan price of Fortnite’s V-bucks currency. “The costs of moving Fortnite has gone up a batch and we’re raising prices to thief salary nan bills,” it said.
As portion of nan changes astatine nan company, Epic is sidesplitting disconnected 3 Fortnite modes. Rocket Racing (which was built by Rocket League developer Psyonix) will unopen down successful October. Fortnite Ballistic — a 5v5 tactical shooter mode — and Festival Battle Stage, which is simply a competitory type of nan Fortnite Festival hit game, will vanish connected April 16. “We've built a batch of Fortnite modes, and successful immoderate cases we grounded to build thing awesome capable to pull and clasp a ample subordinate base,” Epic said connected X.
The institution noted successful its Year successful Review recap past month that though nan hours that players spent successful third-party titles connected nan Epic Games Store accrued by 4 percent successful 2025, “overall gameplay hours declined twelvemonth complete year,” hinting astatine a dip successful Fortnite numbers. The institution said PC players spent $1.16 cardinal connected nan shop successful 2025, an summation of six percent from nan erstwhile year. Of that, $400 cardinal was spent connected third-party PC games. However, Epic Games Store vice president and wide head Steve Allison told Polygon successful February that, factoring successful first-party gross and nan 12 percent trim nan institution takes from third-party games, “the shop is already — moreover pinch each this worldly — marginally profitable now."
Here is nan afloat memo Sweeney shared pinch Epic’s labor connected Tuesday:
Today we’re laying disconnected complete 1000 Epic employees. I'm sorry we're present again. The downturn successful Fortnite engagement that started successful 2025 intends we're spending importantly much than we're making, and we person to make awesome cuts to support nan institution funded. This layoff, together pinch complete $500 cardinal of identified costs savings successful contracting, marketing, and closing immoderate unfastened roles puts america successful a much unchangeable place.
Some of nan challenges we're facing are industry-wide challenges: slower growth, weaker spending, and tougher costs economics; existent consoles trading little than past generation's; and games competing for clip against different increasingly-engaging forms of entertainment.
And immoderate of our challenges are unsocial to Epic. Despite Fortnite remaining 1 of nan astir successful games successful nan world, we’ve had challenges delivering accordant Fortnite magic pinch each season; we're only successful nan early stages of returning to mobile and optimizing Fortnite for nan world's billions of smartphones; and successful being nan industry's vanguard we person taken a batch of bullets successful a conflict which is only successful nan early days of paying disconnected for ourselves and each developers.
Since it's a point now, I should statement that nan layoffs aren't related to AI. To nan grade it improves productivity, we want to person arsenic galore awesome developers processing awesome contented and tech arsenic we can.
What we now request to do is clear: build awesome Fortnite experiences pinch caller seasonal content, gameplay, story, and unrecorded events; accelerate developer devices pinch greater stableness and capacity arsenic we germinate from Unreal Engine 5 and UEFN to Unreal Engine 6. And we'll beryllium kicking disconnected nan adjacent procreation of Epic pinch immense motorboat plans towards nan extremity of nan year.
This isn't our first clip being here. Epic survived upheavals successful 1990's pinch nan move from 2D to 3D pinch Unreal 1; successful nan 2000's building console games pinch Gears of War; and successful 2012 moving to online gaming pinch Paragon and Fortnite. Each time, we rebuilt our foundations and earned a renewed activity position.
Market conditions coming are nan astir utmost we've seen since those early days, pinch monolithic upheaval successful nan manufacture accompanied by monolithic opportunity for nan companies that travel retired arsenic winners connected nan different side. That's what we're aiming to do for our players, and we purpose to bring different like-minded developers successful nan manufacture on connected nan travel to build an progressively unfastened and vibrant early of intermezo together.
At Epic, we pridefulness ourselves successful only hiring nan industry's best, truthful it is very achy to portion pinch truthful galore talented people. The folks impacted by nan layoffs will person a severance package that includes astatine slightest 4 months of guidelines pay, pinch much based connected tenure. We’re besides extending Epic-paid healthcare coverage.
For example, successful nan U.S., they’ll person paid sum for 6 months. We’ll besides accelerate their banal options vesting done January 2027 and widen equity workout options for up to 2 years.
We'll person a institution gathering Thursday to talk astir nan roadmap successful much detail.
-Tim
