Epic Games Announces Layoffs Affecting 830 Employees in Restructuring Move
Epic Games has officially confirmed the widely reported layoffs within the company, revealing that around 830 employees will be affected by the restructuring. This decision comes as Epic seeks to streamline its operations, with approximately two-thirds of the job cuts targeted at teams “outside of core development.”
The layoffs also coincide with Epic’s divestiture of Bandcamp and SuperAwesome, which will result in around 250 employees leaving the company.
Epic Games CEO Tim Sweeney addressed the matter in an all-staff email, which has been shared on the company’s website. In the message, Sweeney acknowledged the financial challenges the company has been facing. He stated, “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.”
Sweeney went on to explain that while Fortnite’s growth is partly driven by creator content with revenue sharing, this business model has lower profit margins compared to the earlier success of Fortnite Battle Royale.
The company has been taking measures to reduce costs globally, such as implementing a net-zero hiring policy and cutting operating expenses in areas like marketing and events. However, these efforts fell short of achieving financial sustainability, leading to the decision to implement layoffs.
Employees affected by the layoffs will receive a severance package that includes six months of base pay and six months of Epic-paid healthcare in the US, Canada, and Brazil. Epic is also offering to accelerate stock option vesting schedules and extend the exercise period for stock options. Additional benefits like career transition services and visa support will be provided where applicable.
Epic Games emphasized that there will be no further layoffs beyond the 830 announced today, and these changes are intended to financially stabilize the company.
Despite these challenges, Epic Games remains committed to various projects, including the next Fortnite Season, Fortnite Chapter 5, and initiatives like “Del Mar,” rumored to be a Fortnite car racing mode, and “Juno,” speculated to be a Fortnite Lego collaboration.
In an accompanying FAQ, Epic outlined its ongoing investments in Fortnite, Rocket League, Fall Guys, Unreal Engine, the Epic Games Store, and various services for developers, underscoring its determination to navigate this transition successfully.
