Epic Games, the multi-billion dollar corporation behind Fortnite and one of the most successful games in the world, is laying off more than 1,000 employees. CEO Tim Sweeney blames a “downturn in Fortnite engagement” for the move, which he attributes to both “industry-wide challenges” and factors “unique to Epic.”
“Today we’re laying off over 1000 Epic employees,” Sweeney says in a memo to the company, which was also shared with the public. “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.”
Epic last laid off 830 people in 2023, which represented around 16% of its workforce at the time. On today’s cuts, Sweeney says affected employees “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.”
According to Circana’s Player Engagement Tracker, Fortnite led in US Feb Monthly Active Users across both PlayStation (35% of actives playing) and Xbox (31%). The avg PS player engaged with Fortnite for 16 hours in the month (vs 21 last Feb), with Xbox players averaging 15 hours (vs 19 last Feb).
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Sweeney says that “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.”
He acknowledges that Fortnite remains “one of the most successful games in the world,” but says the company has “had challenges delivering consistent Fortnite magic with every season,” and is still in the “early stages of returning to mobile.” He also says that “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.”
Sweeney’s not specific about what those bullets are, but it’s tough to imagine he’s referring to anything other than the company’s ongoing battles with entrenched digital storefronts, which has seen Epic go to court with Google and Apple while attempting to wrest a sliver of Valve’s PC gaming pie.
“Since it’s a thing now, I should note that the layoffs aren’t related to AI,” Sweeney also acknowledges. “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”
Epic Games defends Fortnite’s controversial V-Bucks price hike, insisting it’s in “direct correlation to the operating costs” and teasing “amazing things” are coming that’ll make you “understand what’s been going on.”
