Epic Games Lays Off Over 1,000 Employees as Fortnite Fails to Maintain Past Hype

Even the largest and wealthiest gaming companies in the world are not immune from significant financial problems, as Epic Games has once again demonstrated.

What is known

Today, Epic Games CEO and founder Tim Sweeney announced that the company is forced to part with more than a thousand employees.

For most tech giants, the reason for such decisions is currently the increase in investments in AI technologies, but for Epic Games, it is much simpler: recently, there has been a decline in interest in the once mega-popular game Fortnite. There is not yet a mass exodus of players, but the colorful Battle Royale no longer generates the same hype as it did years ago, and the company is reducing expenses for the game's support.

In 2023, 800 people lost their jobs for a similar reason.

The Epic Games CEO sent the following letter to employees:

Today, we are laying off over 1,000 Epic employees. I am sorry that we resort to this again. The decrease in interest in Fortnite, which began in 2025, means we are spending significantly more than we earn, and we have to make serious cuts to maintain the company's financial stability. These layoffs and the closure of some positions, as well as saving over 500 million dollars through reduced spending on contracts and marketing, will allow us to stabilize our position.

Some of the challenges we face are typical for the whole industry - slowed growth rate, reduced spending, and tightening economic conditions. Current console sales are lower than those of the previous generation, and games compete for user attention with other increasingly popular types of entertainment.

Another part of our problems is specific to Epic - despite Fortnite remaining one of the most successful games in the world, we are not succeeding in enchanting players with the magic of Fortnite every season. We are only at the initial stage of returning to the mobile version and optimizing Fortnite for billions of smartphones around the world. Being at the forefront of the industry, we have taken many blows in the battle, which is just beginning to bear fruit for us and all developers.

Since we have brought this up, I want to note that the layoffs are not related to artificial intelligence. We want as many amazing developers as possible to create great content and technologies.

It is obvious to us what needs to be done: to create stunning Fortnite gaming experiences with new seasonal content, gameplay mechanics, storyline, and live broadcasts, as well as to improve developer tools, increasing their stability and capabilities as we transition from Unreal Engine 5 and UEFN to Unreal Engine 6. Towards the end of the year, we will unveil the new generation of Epic with large-scale plans for future releases.

This is not new for us. Epic survived upheavals in the 90s during the transition from 2D to 3D with Unreal Engine, in the 00s during the development of console games like Gears of War, and in 2012, when we moved to online games such as Paragon and Fortnite. Each time we restored our positions and solidified our leadership.

Today's market situation is the most extreme we have observed since it all began. Massive industry upheavals are accompanied by enormous opportunities for companies that emerge victorious. This is exactly what we want for our players and like-minded developers, whom we strive to attract to jointly build an increasingly open and vibrant future for the entertainment industry.

At Epic, we are proud to hire only the best specialists, and therefore it is very painful for us to part with such a number of talented employees. Those affected by the cuts will receive a severance package, including at least four months' base salary, as well as additional payments depending on employment duration. In addition, we maintain employees' health insurance paid by Epic.

In the US, for instance, they will receive paid insurance for 6 months. We will also accelerate the process of granting employees stock options by January 2027 and extend the options' validity for up to two years.

On Thursday, we will have a corporate meeting where we will discuss the current development plan in more detail.

Source: Epic Games