Epic Games is Laying Off Over 1,000 Employees

Epic Games announced today that it’s laying off over 1,000 employees as it continues to deal with dwindling Fortnite engagement. In a letter to employees, CEO Tim Sweeney apologized for the layoffs and insisted on the “unique” challenges the company is currently facing. The exec added that the job cuts “aren’t related to AI,” with Epic also planning to save over $500 million by cutting contracting, marketing, and other expenses.

“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,” Sweeney wrote. “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.”

The last time Epic Games announced some job cuts was in September 2023, when approximately 830 employees were let go. At the time, Sweeney already said that Epic had been “spending way more money than we earn,” and that the company was struggling to make its metaverse-inspired ecosystem financially sustainable. In recent years, Epic was also involved in costly legal battles against Apple and Google, and there’s no doubt the company lost a substantial amount of money when Fortnite was temporarily removed from the App Store and Play Store.

Despite “industry-wide challenges” such as weaker spending and hardware price increases, Sweeney sees a clear path forward for Epic Games. “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,” the exec said.

As for Epic Games employees affected by the layoffs, the company said that it will offer at least four months of severance pay and extended healthcare coverage.