Epic Games is laying off 1,000 employees following a decline in engagement with its popular game, Fortnite. The decision, announced via a company memo posted on Epic’s blog, is aimed at stabilizing the company’s financial situation amid escalating costs.
CEO Tim Sweeney stated that the downturn in Fortnite engagement, which began in 2025, has resulted in increased expenditures that exceed the company’s revenue. He emphasized that the layoffs, coupled with identified cost savings exceeding $500 million through reductions in contracting and marketing, are necessary measures to ensure the company’s sustainability.
In tandem with the layoffs, Epic recently raised the price of V-Bucks, its in-game currency for Fortnite, citing significant increases in operational costs. The company noted the rising expenses as a driving factor behind this pricing adjustment.
Sweeney clarified that the job cuts are not a direct result of advancements in artificial intelligence that could render developer positions obsolete. However, he acknowledged challenges stemming from AI, including ongoing RAM shortages and heightened chip demand, which have affected overall consumer spending.
Employees affected by the layoffs will receive four months of severance pay, with additional compensation for those with longer service. Moreover, Epic will cover the healthcare costs for U.S. employees for six months after termination. Epic Games, known for its development of the Unreal Engine and Fortnite, is taking these steps as part of a broader strategy to navigate its financial landscape and respond to changing market conditions.
