Epic Games, the creator of Fortnite and the Unreal Engine, have announced plans to lay off more than 1000 staff. In a company-wide letter, CEO Tim Sweeney blamed both “industry-wide challenges” and “challenges unique to Epic”, including a downturn in Fortnite’s popularity.
In addition to the layoffs, the company have made more than $500m in cuts by reducing contracting, marketing, and closing open roles. Sweenet says this puts the company “in a more stable place.”
Sweeney, a strong advocate of AI, says the layoffs “aren’t related to AI”.
Today we’re laying off over 1000 Epic employees. I’m sorry we’re here again. The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded. This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place.
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.
And some of our challenges are unique to Epic. 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 optimizing Fortnite for the world’s billions of smartphones; and in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.
Since it’s a thing now, 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.
Fortnite remains one of the most popular games in the world, with millions of players logging in daily. Despite this, Epic have recently raised the price of V-bucks, leaned even harder into licensing deals (which is why you can now build a bar for flossing Jawas), and started selling cosmetics that are nearly three times the cost of the games they’re from.
Sweeney’s plan to get Epic back on track sounds very much like doing more of the same. “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. And we’ll be kicking off the next generation of Epic with huge launch plans towards the end of the year.”
No mention of the Epic Games Store, which may be telling of how much the storefront does (or doesn’t) contribute to the company’s bottom line.
Still, Sweeney’s keeping his head up, saying that “Market conditions today are the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side.”
For the more than 1000 employees who will now be looking for work in an industry that has already gone through round after round of layoffs, I don’t imagine that opportunity will be much solace.
To put on my devil’s advocate hat for a moment (it’s one with horns and a pitchfork stencil), I don’t know how you take a company like Epic, which grew so rapidly during the pandemic after finding itself sitting on top of one of the most popular games in the planet, and cushion the blow of the heelturn that came in 2022. However, the risks and dangers of the investments and swings the company has been making in recent years would not have been invisble to the people making them. That they’re not paying off means that so many people who had no part in deciding such an aggressive strategy – one that challenged Apple, Google, and Valve – will pay the price.
