“Spending way more than we earn” — CEO Tim Sweeney attributed layoffs to major structural changes in the company’s economics.
Epic Games, the developer of Fortnite, has slashed 16% of its workforce, or approximately 830 employees, due to spending “way more” money than it was generating due to unrealistic expectations of metaverse-inspired revenue.
In a memo sent to Epic Games employees on September 29, CEO Tim Sweeney stated, “We concluded that layoffs are the only way and that doing them now and on this scale will stabilize our finances,”. He also added that:
“I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic,”
Epic Games have laid off 870 employees today across multiple departments, a whopping 16% of their workforce. Those laid off will receive 6 months severance
"For awhile now, we've been spending way more money than we earn, investing in the next evolution of Epic and Fortnite" pic.twitter.com/4W6Pn31CU3
— Jake Lucky (@JakeSucky) September 28, 2023Sweeney attributed the company’s recent growth to the Fortnite Creator program, which allows players to create and sell in-game content for a 40% share. However, the shift has resulted in lower margins.
“Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.”
In addition to the previously mentioned layoffs, Sweeney announced that an additional 250 employees would be leaving Epic Games, as the company announced that it would be selling the recently acquired music website Bandcamp and spinning off its marketing company SuperAwesome. This child-safety technology company joined Epic in 2020.
Notably, soon-to-be-former employees of Epic Games will receive six months of pay and six months of paid healthcare if they reside in the United States, Canada, or Brazil.
In addition to Fortnite, which has approximately 400 million registered users, Epic Games also operates the Unreal Engine. God of War and PlayerUnknown’s Battle
