Epic Games lays off over 1,000 employees; CEO Tim Sweeney cites drop in Fortnite usage

Epic Games has laid off 1,000 employees as part of cost-cutting measures, the maker of the popular game, Fortnite, said in a letter to its staff.

The letter dated March 24 was issued under the name of chief executive Tim Sweeney.

The layoffs come amid a sharp decline in usage of its flagship game, Fortnite, the letter said.


“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we're only in the early stages of returning to mobile and optimising Fortnite for the world's billions of smartphones.”

Sweeney added that the recent cuts, along with $500 million in cost savings from contracting, marketing, and closing some open roles, are expected to reduce overall expenses.

Affected employees will receive a severance package that includes at least four months of base pay, with additional compensation based on tenure, according to the company.

The company has also extended paid healthcare coverage for impacted employees. However, the criteria for the layoffs remain unclear.

Sweeney wrote that the development comes amid broader challenges in the sector.

“Some of the challenges we're facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation's; and games competing for time against other increasingly engaging forms of entertainment,” he said.

Epic Games layoffs not due to AI

Later in the address, Sweeney clarified that the job cuts are not related to artificial intelligence (AI), adding that the company will continue to work with developers worldwide.

“I should note that the layoffs aren't related to AI. To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”

Epic Games new launch

Outlining its future plans, the company said it will realign its focus on enhancing experiences for its flagship game, Fortnite.

“What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6.”

Sweeney added that the company plans to unveil new products by the end of the year.