Epic Games to lay off 1,000 employees as Fortnite engagement drops

The organisation explained that a number of internal and external factors have impacted working life and profits at Epic.

US games and software developer Epic Games has announced plans to lay off more than 1,000 people amid a drop in the popularity of its online gaming platform Fortnite over the last 12 months. 

In a memo issued to Epic’s workforce, CEO Tim Sweeney said he was sorry that the organisation is once again in this position, having previously cut 16pc of its workforce in 2023. He explained that the downturn in Fortnite engagement, which began in 2025, has resulted in the organisation spending more money than it is currently making. 

“This layoff, together with over $500m of identified cost savings in contracting, marketing and closing some open roles puts us in a more stable place,” said Sweeney. 

He added: “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.”

However, he explained that some of the issues are unique to Epic. For example, last week, Epic raised the prices of Fortnite’s in-game currency, saying that “the cost of running Fortnite has gone up a lot and we’re raising prices to help pay the bills”. 

Sweeney also noted that despite its prevalence in the industry and wider workplace conversation, the layoffs have not been prompted by AI. “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.” 

Impacted employees will receive a severance package that includes at least four months of base pay, extended Epic-paid healthcare coverage, an acceleration of stock options vesting through January 2027 and extended equity exercise options for up to two years. There is to be a meeting on Thursday (26 March) to discuss the matter further. 

In November of last year, Google and Epic Games reached a settlement over an antitrust lawsuit that was filed in 2020 by Epic, in which the search engine giant was found to hold a Play Store monopoly. 

The more than five-year conflict began when Fortnite was removed from the Apple App Store and Google Play Store for violating their policies with its in-game payment system that would allow users to pay directly for in-app purchases. At the time, Epic said the process where organisations took a 30pc cut from every transaction made through apps on their platforms was unfair.

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