In a surprising turn of events, Epic Games, the powerhouse behind the popular game Fortnite, has announced a massive round of Epic Layoffs. The founder and CEO of the company Tim Sweeney informed the staff that, around 830 employees, which accounts for 16% of the workforce will be laid off. This decision is a result of the companys focus on creating a metaverse inspired ecosystem and the financial difficulties associated with it.
In his letter to the employees Sweeney emphasized that the company has been spending money than it earns for some time now. While they had hoped to overcome this challenge without resorting to layoffs it became apparent that it was necessary.
“We have been consistently spending money than our earnings ” admitted Sweeney. The main reason behind this strain is the change, in Fortnites revenue model. Although the game is experiencing growth a significant portion of its revenue comes from content creators who receive a share resulting in profit margins compared to before.
Despite these Epic Layoffs, the company is not cutting back on its core businesses. Epic Games remains dedicated, to the development of Fortnite nurturing the Fortnite creator community as supporting Rocket League and Fall Guys. However there might be some delays in releasing products due to current resource limitations.
In an effort to streamline costs further Epic Games has decided to divest from Bandcamp, a distribution platform they acquired in 2022. Additionally they will be spinning off most of SuperAwesome, a company that focuses on tools for managing consent in childrens games. Nevertheless Epic will continue to hold ownership of SuperAwesome’s Kids Web Services.
To wrap up his letter Sweeney expressed optimism about Epics prospects with their flagship products Unreal Engine and Fortnite. He also made mention of the battle with Apple and Google and highlighted their commitment, to challenging these tech giants monopolies on distribution. Our thoughts are with the Epic Games employees affected by these Epic Layoffs.