Today, Epic Games Founder and CEO Tim Sweeney announced in a blog post that the company has laid off over 1,000 employees, nearly 20% of its overall workforce.
According to the CEO, these cuts will save $500 million by reducing spending on contracting and marketing and closing open roles. He also emphasized that these cuts have nothing to do with anything related to AI.
According to last month’s Epic Games 2025 review, player spending on third-party PC games grew 57%, reaching an all-time record of $400 million. PC players also spent $1.16 billion on the Epic Games Store, up 6% year over year.
Despite this, Sweeney cited “extreme” market conditions and a struggle to deliver “consistent Fortnite magic” with every season.
Today we’re laying off over 1000 Epic employees. I’m sorry we’re here again. The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded. This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place.
Some of the challenges we’re facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other increasingly-engaging forms of entertainment.
And some of our challenges are unique to Epic. Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we’re only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones; and in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.
Since it’s a thing now, I should note that the layoffs aren’t related to AI. To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.
What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6. And we’ll be kicking off the next generation of Epic with huge launch plans towards the end of the year.
This isn’t our first time being here. Epic survived upheavals in 1990’s with the move from 2D to 3D with Unreal 1; in the 2000’s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite. Each time, we rebuilt our foundations and earned a renewed leadership position.
Market conditions today are the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side. That’s what we’re aiming to do for our players, and we aim to bring other like-minded developers in the industry along on the journey to build an increasingly open and vibrant future of entertainment together.
At Epic, we pride ourselves in only hiring the industry’s best, so it is very painful to part with so many talented people. The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.
For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.
We’ll have a company meeting Thursday to talk about the roadmap in more detail.
Employees affected by the cuts Impacted employees will receive at least four months of base pay, extended healthcare coverage (six months in the U.S.), and accelerated stock option vesting through January 2027. Key members of these layoffs include
- Psyonix Community Manager Devin Connors
- Fortnite Battle Royale Design Director Christopher Pope
- Fortnite Principal Engineer Evan Kinney
- Fortnite QA Engineer Jonah Kettman
- Psyonix Community Manager Devin Connors
- Fortnite Battle Royale Lead Writer Nik Blahunka
Many of these individuals have been with the company for well over five years and are responsible for features like live events, replay mode, rivalry, and Fortnite Festival, just to name a few. This is the second such mass layoff at Epic Games since 2023, when the company laid off about 830 employees, about 16% of its workforce.
Earlier this month, Epic Games also announced that the price of V-Bucks, the paid currency used in Fortnite, is going to increase to “Help Pay the Bills.” The change will go live on March 19, and you will get fewer V-Bucks for the same price as before; you can see the details here.
For more information and updates on Epic Games and other financial video game industry news, you can check back to Simulation Daily.
