Epic Games, the studio behind Fortnite, has announced another major round of layoffs, with more than 1,000 employees set to lose their jobs. The decision, according to CEO Tim Sweeney, comes as the company grapples with declining engagement in its flagship title and broader challenges across the gaming industry. In a company-wide note, Sweeney pointed to a sustained drop in Fortnite player engagement that began last year as a key reason for the cuts. While Fortnite remains one of the most successful games globally, maintaining consistent excitement across seasons has proven difficult. “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,” Sweeney explained. He also acknowledged that the issues go beyond internal challenges. The live-service gaming space has become increasingly competitive, with studios facing reduced consumer spending and rising development costs, making it harder to sustain long-term growth. Sweeney admitted that Epic has faced hurdles in keeping the “Fortnite magic” alive with each new update. He noted that the company is still in the early stages of expanding back into mobile gaming and optimizing the experience for a global smartphone audience. “Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season,” he said.
Emmanuel Umahi
As part of its restructuring, Epic is also scaling back some of Fortnite’s side experiences. Game modes like Rocket Racing, Ballistic, and the Festival “battle stage” are being wound down, although the core Fortnite Festival experience will remain active. The layoffs are part of a broader cost-reduction strategy. Epic has identified over $500 million in savings, spanning marketing, external contracts, and unfilled roles. Earlier signs of financial pressure emerged when the company increased the price of V-Bucks, citing rising operational costs. Epic says impacted workers will receive four months of severance pay, along with six months of paid healthcare for U.S.-based employees. Sweeney also clarified that the layoffs are not related to AI, addressing a growing concern across the tech industry. Epic’s layoffs are the latest in a wave of job cuts across the gaming industry. Several studios have recently scaled back operations or shut down projects entirely, reflecting the volatile nature of the live-service model. Sweeney described the current moment as one of both disruption and opportunity, “Market conditions today are the most extreme we’ve seen since our early days, with massive upheaval in the industry accompanied by massive opportunity.”
Emmanuel Umahi
