In brief: Epic Games is saying goodbye to more than 1,000 employees as part of an effort to keep the company afloat. CEO Tim Sweeney on Tuesday shared a note sent to staffers outlining the changes and why they are necessary. The executive primarily blamed a downturn in Fortnite engagement that started in 2025 for the current situation, which left the company spending significantly more money than they are bringing in.
Sweeney also pointed to industry-wide changes including slower growth, weaker spending on games and consoles, tougher cost economics, and new forms of entertainment competing for gamers' attention as additional factors hurting their business.
Some of Epic's issues, Sweeney added, are uniquely their own. The company is still in the early stages of bringing Fortnite back to mobile, and it's also been a struggle to deliver what Sweeney called consistent Fortnite magic with each and every season.
To be clear, Epic says the layoffs aren't related to the AI revolution that has already ravaged other industries. Sweeney said that to the extent it improves productivity, they want to have as many awesome developers developing great content and tech as they can.
Epic said outgoing team members will receive a severance package that includes at least four months of base pay, and more based on tenure. Those affected will also receive extended healthcare coverage and realize accelerated stock option vesting.
The good news for Epic is this isn't their first rodeo. They successfully navigated the transition from 2D to 3D in the 90s, adapted to console games in the 2000s, and launched Fortnite in the 2010s.
Moving forward, Sweeney said Epic needs to get back to building "awesome" Fortnite experiences complete with fresh seasonal content as well as engaging stories and gameplay, plus more live events. He also wants the company to enhance its developer tools with a focus on capability and stability as they make the transition from Unreal Engine 5 and UEFN to Unreal Engine 6. Sweeney even teased "huge launch plans" towards the end of the year, but didn't elaborate further.
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