Bloomberg has reported that Epic is planning to lay off around 16% of its total workforce, or close to 900 employees.
“For a while now, we’ve been spending way more money than we earn,” Epic CEO Tim Sweeney wrote in a memo to employees shared by Bloomberg. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see this was unrealistic.”
The cuts come as the company makes “major structural changes” to its economics, with Fortnite seeing growth driven largely by user-created content with revenue sharing, which Sweeney reportedly claims is a lower-margin business than the boom it first saw with Fortnite Battle Royale that fueled the company’s rapid expansion.
The CEO told staff that, despite the company’s efforts to reduce its spend on things like marketing, events and additional hiring it’s concluded that immediate layoffs at this scale are “the only way” to put it back on course financially.
Epic Games Inc. is laying off about 900 employees or 16% of its workforce, according to a person familiar with the matter. https://t.co/w0pstJAGVW
— Bloomberg (@business) September 28, 2023
Epic has also sold off music platform Bandcamp, which it acquired just over a year ago, and has spun off marketing company, SuperAwesome, which had joined Epic in 2020.
These are the next in a long line of sizeable layoffs at major developers and publishers this year, with SEGA having just announced the cancellation of HYENAS with layoffs to follow at Creative Assembly, as well as cuts at Microsoft including Xbox and Bethesda, Blizzard, Bioware, Striking Distance, CD Projekt Red and many more.
