Epic Games has joined the long list of gaming companies to slash its staff after winding up during the pandemic gaming boom. Following a report from Bloomberg alleging that the Fortnite dev is laying off 16% of its total staff, Epic Games’ Tim Sweeney admitted that indeed, the company is letting go 830 workers (slightly fewer than the 870 originally reported). Another 250 people are leaving as their divisions are being spun out as independent companies.
Epic, of course, not only runs Fortnite (which has been one of the biggest and most lucrative games in the world for the last six years) but also develops Unreal Engine.
“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,” Sweeney writes. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.” He characterizes Fortnite’s current model as growing but dependent on revenue sharing with creators, which makes for a “lower business margin.” Slashing hiring and cutting spending apparently didn’t return the company to “financial sustainability,” so Sweeney says “layoffs are the only way” – along with offloading some of its other properties.
“We aren’t cutting any core businesses,” the company clarifies in its follow-up FAQ, telling the public that “about two-thirds of the layoffs were in teams outside of core development.” It also claims that there won’t be more layoffs. Six months of severance and healthcare and accelerated stock vesting are expected for affected workers.
