Why Epic Games is laying off more than 1,000 employees
What's the story
Epic Games, the developer behind the popular game Fortnite, has announced plans to lay off over 1,000 employees. The decision comes in light of a significant drop in Fortnite's usage. CEO Tim Sweeney said that the company has been spending "significantly more than we're making" since player engagement with the game started declining in 2025.
Financial strategy
Layoffs part of larger cost-cutting strategy
Sweeney also revealed that the layoffs are part of a larger cost-cutting strategy. The company expects to save $500 million by reducing contracting and marketing expenses as well as leaving some roles unfilled. "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," Sweeney said in his note to employees.
Gaming trends
Broader trend of falling engagement for popular games
The decline in Fortnite's usage mirrors a broader trend of falling engagement for popular games, especially those that rely heavily on regular updates and new content. "We've had challenges delivering consistent Fortnite magic," Sweeney said. He also noted that the current market conditions are the toughest since Epic Games was founded in 1991.
Industry impact
Similar layoffs across the gaming industry
This isn't the first time Epic Games has had to lay off employees. In September 2023, the company cut around 830 jobs or about 16% of its workforce to improve profitability. Other gaming companies have also been forced to make similar decisions amid rising costs and declining engagement rates. Electronic Arts laid off hundreds of workers in September, while Amazon's job cuts last year affected its gaming division as well.