Epic Games is Laying Off 16% of Its Employees
- Laurent Giret
- Sep 28, 2023
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Epic Games announced today that it was laying off around 16% of its workforce, which represents approximately 830 employees. The developer of Fortnite and the Unreal Engine also announced that it was selling the music site Bandcamp it acquired last year, while its marketing company SuperAwesome would become independent.
In a letter sent to employees today, CEO Tim Sweeney explained that Epic Games has been “spending way more money than we earn” for a while.” And even though the company has made efforts to reduce costs, including its legal expenses in its fight against the App Store and Google Play Store duopoly, that wasn’t enough to stabilize the business.
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“I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic, “ Sweeney explained. “While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics,” the exec added.
Going forward, Epic Games will focus on its first-party games including Fortnite, Rocket League, and Fall Guys, its Unreal Engine, the Epic Games Store, and other core services for developers. Sweeney also said that there would be no more layoffs and that the company would continue hiring for critical roles.
The video games industry has not been spared by layoffs in recent weeks. Embracer Group, a Swedish conglomerate that recently purchased Crystal Dynamics (Tomb Raider), Eidos-Montreal (Deus Ex), and Gearbox Software (Borderlands) announced a restructuring program that led to the closure of Saints Row developer Volition last month. Earlier today, Sega also announced that it had canceled the upcoming shooter Hyenas as well as “some unannounced titles under development. ” Creative Assembly, the developer of Hyenas will reportedly have to lay off employees.