Epic Games has announced mass layoffs affecting over 1000 employees, a move aimed at significantly reducing its workforce and containing costs, deemed indispensable by management.
Epic Games CEO, Tim Sweeney, confirmed the news, openly communicating the reasons behind this decision to employees and the public.
Sweeney explained that Epic Games is spending much more than it earns. The layoffs are therefore intended to rebalance the company’s finances through cost reduction, albeit at the expense of a thousand jobs.
Tim Sweeney’s Letter to Employees
A crucial factor behind this decision is the decline in interest in Fortnite. Sweeney stated: “Today we are laying off over 1000 Epic employees. I’m sorry that we’re here again.” He added that “The decline in interest in Fortnite, which began in 2025, means that we are spending significantly more than we earn, and we are forced to make substantial cuts to ensure the company’s financial sustainability.” These layoffs, combined with “over $500 million in cost savings identified in contracting, marketing, and closing some open positions,” aim to stabilize the company’s economic situation.
Sweeney also attributed part of the crisis to the general state of the gaming industry, citing slow growth, reduced user spending due to the economic climate, and generally higher operating costs.
The Epic Games CEO highlighted some of the sector’s main challenges, stating that “Current consoles are selling less than those of the previous generation, and games are competing for time with increasingly engaging forms of entertainment.”
Further difficulties are internal to the company, particularly the decline of Fortnite. The game is undergoing a complex phase of returning to the mobile market, which requires significant investments in optimization and adjustments.
Sweeney also clarified that “the layoffs are not related to AI,” specifying that the company intends, on the contrary, to focus on content creation by developers.
According to Sweeney, the company’s primary goal is to intensify efforts to develop new, more impactful experiences in Fortnite, accelerate support for Unreal Engine 5, and prepare for the evolution towards Unreal Engine 6. He announced: “And towards the end of the year, we will kick off the new generation of Epic with major launch projects.”
The letter concludes with Sweeney expressing confidence, recalling that Epic Games has overcome previous periods of crisis, strengthening its foundations and achieving new leadership positions. Although current “market conditions” are among the most “extreme” with “enormous upheavals in the sector,” he also sees “enormous opportunities.”
Epic Games has announced that it will provide laid-off employees with a severance package that includes several months’ salary and health coverage. Further details on the situation are expected later in the week, with a meeting scheduled for Thursday.