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Epic Games announces major layoffs amid financial strain
Epic Games, the developer behind the popular online game Fortnite, confirmed Tuesday it is reducing its workforce by more than 1,000 employees. CEO Tim Sweeney attributed the decision to a sharp drop in player engagement that began earlier this year.
Financial pressures drive cost-cutting measures
In a memo to staff posted on the company's website, Sweeney explained the layoffs were necessary to address a widening gap between expenses and revenue. He stated the company had been "spending significantly more than we're making," requiring "major cuts to keep the company funded."
The move follows recent increases in the price of Fortnite's in-game currency, V-Bucks, which the company said was intended to offset rising operational costs.
Industry challenges and Epic's unique struggles
Sweeney acknowledged broader industry headwinds, including slower growth, reduced consumer spending, and heightened competition for user attention. However, he also highlighted company-specific difficulties, such as maintaining consistent quality across Fortnite seasons and delivering a full mobile experience.
Epic's legal battles with Apple and Google over app store policies further complicated its mobile strategy. Fortnite returned to Apple's U.S. App Store in 2025 after a nearly five-year absence, following a dispute over in-app payment systems.
"In being the industry's vanguard, we have taken a lot of bullets in a battle that is only in the early days of paying off for ourselves and all developers,"
Tim Sweeney, CEO of Epic Games
AI adoption not a factor in layoffs
Addressing speculation about the role of generative AI in the job cuts, Sweeney clarified the decision was unrelated to AI advancements. He emphasized the company's focus on maximizing developer productivity and output.
"To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can."
Tim Sweeney
Second round of layoffs in recent years
The latest cuts mark the second significant workforce reduction at Epic in recent years. In September 2023, the company laid off 830 employees, roughly 16% of its staff, citing similar financial challenges.
Sweeney expressed regret over the latest round of layoffs, stating, "I'm sorry we're here again."
Broader gaming industry faces similar pressures
Epic's layoffs reflect a wider trend in the gaming sector, where companies of all sizes have announced job cuts. Earlier this month, Electronic Arts (EA) reduced staff working on its Battlefield franchise, citing a need to "better align our teams around what matters most to our community."
