Tim Sweeney, the CEO of Epic Games, has announced that the company is laying off over 1,000 employees. The decline in Fortnite engagement since 2025 has forced Epic Games to take this step in order to keep the business afloat.
Epic Games laying off over 1,000 employees. In a message to employees - which has since been made public - Tim Sweeney, CEO of Epic Games, writes: "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." Price adjustments for V-Bucks, the in-game currency in Fortnite, were recently announced, with the company stating that such measures were necessary to "help pay the bills". Fortnite's original co-op mode, Save the World, has also recently switched to a free-to-play model, presumably to boost engagement.
Sweeney: "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."
But he also writes that the layoffs aren't related to AI. Their next steps are as follows: build Fortnite experiences with "fresh" seasonal content and accelerate the development of tools with greater stability and capability as they 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," says Sweeney.
Sweeney: "At Epic, we pride ourselves in only hiring the industry's best, so it is very painful to part with so many talented people. The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We're also extending Epic-paid healthcare coverage. For example, in the U.S., they'll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years."
