Epic Games slashes 1,000 roles amid Fortnite slowdown

In a significant shift, Epic Games has announced it will reduce its workforce by more than 1,000 employees, attributing this decision to a notable decline in engagement with its flagship title, Fortnite. The company acknowledged that its expenditures have surpassed its revenues, prompting the need for major layoffs as a strategy for financial sustainability. CEO Tim Sweeney addressed the situation in a detailed memo, explaining, "The downturn in Fortnite engagement that began in 2025 means we’re incurring costs that exceed our income, necessitating substantial cuts to maintain funding for the company." He further noted that the layoffs are part of a broader initiative that includes identifying over $500 million in savings through various measures such as contracting, marketing, and the closure of certain open positions. Sweeney emphasized that the challenges in sustaining Fortnite’s popularity have persisted since last year, stating, "We've faced difficulties in delivering consistent Fortnite magic." He characterized the current market conditions as the most challenging the company has faced since its inception, citing increased competition, reduced consumer expenditure, and declining console sales as contributing factors. Despite these hurdles, Sweeney reassured that the layoffs are not due to advancements in AI, which he claims are actually enhancing productivity within the company. He also mentioned that Epic Games is in the initial phases of revitalizing its mobile platform and optimizing the game experience for millions of smartphone users. In conjunction with the layoffs, Epic Games will discontinue three of its recent game modes: Rocket Racing, Ballistic, and Festival Battle Stage. Rocket Racing will continue until October 2026, while the other two modes will be taken offline on April 16, coinciding with Fortnite's 40.20 update. Employees affected by the layoffs will receive four months of severance pay, with additional compensation based on their tenure at the company. Moreover, Epic Games will maintain healthcare coverage for its U.S. employees for six months following their departure.