Epic Games has announced plans to lay off over 1,000 employees, about a quarter of its 4,500-strong workforce, to address financial challenges.
Tim Sweeney, CEO and founder of Epic Games, informed staff that player engagement with Fortnite, the company’s flagship title, has declined since last year. Fortnite is Epic’s primary revenue source, relying on in-game purchases by millions of players.
Sweeney acknowledged that the company has been spending more than it earns, necessitating significant cost-cutting measures to maintain financial stability. In a company-wide memo, later shared online, he stated that these layoffs were essential for keeping the business on track.
The CEO also highlighted broader challenges in the gaming industry, including reduced spending on games and consoles, coupled with rising development costs. However, he noted that Epic faced added difficulties, particularly as new Fortnite seasons generate waning excitement among players.
Adapting Fortnite for smartphones has also proven costly, exacerbating the financial strain. Previously, Epic clashed with Apple and Google over app store payment policies, resulting in Fortnite’s removal from their platforms for some time.
The game has since returned but continues to be a major investment area for the company.
