Fortnite maker Epic Games is laying off 16% of its workforce, impacting 870 people

Epic Games, the renowned creator of Fortnite, announced on Thursday that it will be implementing layoffs, affecting approximately 870 employees, which amounts to 16% of its workforce. The company is also divesting Bandcamp, an online audio distribution platform it acquired in the previous year. Additionally, it will be spinning off a significant portion of SuperAwesome, a technology developer focused on creating safe environments for children, which Epic Games acquired in 2020. The news regarding the layoffs was initially reported by Bloomberg.

In a memo addressed to the employees, Epic Games CEO Tim Sweeney emphasized that the company has been facing a financial imbalance. Despite investing heavily in the advancement of Epic and the growth of Fortnite as a metaverse-inspired ecosystem for creators, expenditures have exceeded earnings. Sweeney acknowledged that he had previously believed the transition could be navigated without the need for layoffs, but upon reflection, it became evident that this was an unrealistic expectation.

Sweeney noted that Epic Games has been diligently working to minimize costs, including implementing a freeze on new hires and reducing operating expenses in areas such as marketing and events. However, despite these efforts, the company fell short of achieving financial sustainability. Accordingly, Epic Games made the strategic decision to move forward with layoffs as a means to stabilize its finances.

Regarding the fate of Bandcamp and SuperAwesome, Bandcamp will be amalgamated with Songtradr, a music marketplace company. Meanwhile, SuperAwesome's advertising business will operate as an independent entity under the SuperAwesome brand, led by the current CEO, Kate O'Loughlin.

Sweeney reassured employees that the ongoing reduction in costs will not compromise the development process or the core aspects of the company's business operations. Although some products and initiatives may experience delays due to limited resources, Epic Games remains steadfast in its commitment to realizing its ambitious plans. Sweeney expressed a willingness to accept these schedule tradeoffs if it means maintaining the ability to achieve the company's goals, attain profitability, and become a leading metaverse enterprise.

Epic Games emphasizes its dedication to shipping its highly anticipated projects, which include the upcoming Fortnite Season and Fortnite Chapter 5, titled Del Mar, Sparks, and Juno. The release schedules for these initiatives remain unchanged.

In related news, Epic Games recently announced that prices for Fortnite V-Bucks will increase by approximately 12% to 15% per bundle in the United States and several other countries on October 27. The company attributes this price adjustment to economic factors such as inflation and currency fluctuations, as detailed in a blog post.

These layoffs occur concurrently with Epic Games' filing of a cert petition with the Supreme Court on Wednesday. The petition seeks a reexamination of a 2021 ruling regarding Apple's App Store policies. Should the Supreme Court decide to proceed with the case, it would reopen the legal battle between Epic Games and Apple, which commenced in August 2020.

Addressing these latest developments, Epic Games highlights its ongoing efforts to minimize legal expenses while remaining committed to challenging the distribution monopolies and taxes imposed by Apple and Google. The company believes that a thriving metaverse will generate opportunities not only for Epic Games but also for all other developers involved.dditionally, the layoffs coincide with Epic's filing of a cert petition with the Supreme Court. The petition seeks a reexamination of a 2021 ruling related to Apple's App Store policies. If the Supreme Court agrees to hear the case, it would reopen the legal battle between Epic and Apple that commenced in August 2020.

In a statement published in today's newsroom post, Epic emphasizes its efforts to reduce legal expenses while continuing to oppose Apple and Google's monopolistic distribution practices and taxes, with the aim of fostering a thriving metaverse that presents opportunities for Epic and all other developers.