Epic Games cuts 1,000 jobs, says Fortnite engagement is down

In a significant move, Epic Games has announced the termination of 1,000 employees, as revealed in a recent memo shared on the company's blog. CEO Tim Sweeney addressed the situation, attributing the layoffs to a noticeable decline in engagement with Fortnite that began in 2025. He noted that the company is experiencing a disparity between its revenue and expenditures, necessitating drastic measures to ensure financial stability. Sweeney mentioned that alongside the layoffs, Epic is aiming to achieve over $500 million in cost savings through reductions in contracts, marketing expenses, and the closure of certain open positions. This strategic shift is intended to stabilize the company’s financial standing. In a related development, Epic has raised the price of V-Bucks, the in-game currency for Fortnite, citing increased operational costs. Sweeney clarified that the layoffs are not a direct result of artificial intelligence displacing jobs, although he acknowledged that the broader industry is feeling the impact of AI-related challenges, including a RAM shortage and elevated chip demand, which have influenced consumer spending. Employees affected by the layoffs will receive four months of severance pay, with additional compensation for those who have been with the company longer. Furthermore, Epic has committed to covering healthcare costs for its U.S. employees for six months post-layoff.