Video game maker Epic Games, the creator of Fortnite, announced on Tuesday it is laying off 1,000 employees, or about 20% of its workforce. (In 2023, Epic cut 830 jobs or 16% of its workforce at that time, per Variety.)
“I’m sorry we’re here again,” Epic Games CEO Tim Sweeney said in a note to Epic employees, which the company posted on X. “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,” Sweeney continued.
Fast Company reached out to Epic, which had no further comment.
The note said some of the challenges the company is facing were industry-wide. Those challenges included lower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other entertainment. Sweeney said the layoffs are not due to AI.
However, some of the challenges are unique to Epic, most notably, the challenges stemming from a long-running legal battle with Google and Apple to return Fortnite back to both app stores, after Epic encouraged Fortnite customers to intentionally break the rules, resulting in Fortnite getting kicked off both phones and tablets.
Epic, meanwhile, argued both companies violated antitrust laws by forcing users to pay for apps and in-app purchases through their app marketplaces, while taking a slice of every transaction.
With both suits largely concluded, Epic is moving forward with the help of a $1.5 billion investment from Disney.
Despite being one of most successful games in the world, Epic said Fortnite “is just 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.”
What’s next for Epic Games and those employees?
The company said it will continue to build “awesome” Fortnite experiences with fresh seasonal content, gameplay, story, and live events as it evolves from Unreal Engine 5 and UEFN to Unreal Engine 6. At the end of the year, Epic plans to kick off the next generation of Epic.
This isn’t the only rough patch for Epic. It survived difficulties in 1990’s with the move from 2D to 3D with Unreal 1, and in the 2000’s building console games with Gears of War. Then, it faced difficulties again in 2012, in moving to online gaming with Paragon and Fortnite.
However, Epic did concede that this time is different because “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.”
Epic said those employees affected by the layoffs will receive a severance package including at least four months of base pay based on tenure, including paid healthcare coverage. U.S. employees will receive paid coverage for 6 months, accelerated stock options vesting through January 2027, and extended equity exercise options for up to two years.