Epic is cutting more than 1,000 jobs after Fortnite slowdown, CEO says

Epic Games is laying off more than 1,000 employees, with CEO Tim Sweeney saying the company has been spending more than it earns after a slowdown in Fortnite engagement. In a note to staff, Sweeney said Epic needed “major cuts” to keep the business funded and put it on more stable footing.

According to Epic’s note to employees, the layoffs are part of a broader cost-cutting plan that also includes more than $500 million in savings from contracting, marketing, and unfilled roles. Sweeney also said the cuts are not tied to AI.

He pointed instead to wider industry problems, including slower growth, weaker consumer spending, higher operating costs, and current console sales trailing the last generation. Epic plans to hold a company meeting on Thursday to go over its roadmap in more detail.

The company says affected workers will get at least four months of base pay, with more depending on tenure, plus extended healthcare. For US employees, Epic-paid healthcare will continue for six months. The company is also accelerating stock options through January 2027 and extending equity exercise windows for up to two years.

This is the second major round of cuts at Epic in a fairly short span. Back in September 2023, the company laid off more than 800 employees, or about 16% of its workforce, and also sold Bandcamp while Mediatonic, the Fall Guys studio, was hit by cuts. At the time, Epic had already moved to net-zero hiring and reduced spending on marketing and events, but said that still wasn’t enough to reach financial sustainability.

The new layoffs come just a week after Epic said it was raising Fortnite V-Bucks prices, citing higher costs to run the game.