Epic Games, the company behind popular video game Fortnite, has announced that it will be laying off 830 employees, which accounts for 16% of its staff. The layoffs are reportedly a result of excessive spending and Fortnite’s growth slowing down. In addition to the job cuts, Epic Games will be divesting recent acquisition Bandcamp and spinning out SuperAwesome, resulting in an additional 250 people leaving the company. The layoffs are said to be necessary to stabilize the company’s finances, as it has been spending more money than it earns.
CEO Tim Sweeney acknowledged in a memo that the company had been spending more than it should and that he had been optimistic about avoiding layoffs. Sweeney stated that layoffs are now the only way to stabilize their finances, despite the company’s attempts at other cost-cutting measures. Laid-off employees will receive six months’ salary and healthcare as severance. Sweeney mentioned that Fortnite’s growth is now primarily driven by user-created content, which is a lower margin business compared to when the game initially took off.
It is unclear which division of Epic Games is most affected by the layoffs, but former employees of Mediatonic, the developer behind Fall Guys, have mentioned being affected. Epic Games acquired Mediatonic in 2021. Besides the job cuts, Epic Games will no longer own Bandcamp, as it has been acquired by Songtradr. The company also acquired SuperAwesome as a kid tech platform in 2020, but the advertising business of SuperAwesome will now spin off under its own company, headed by current CEO Kate O’Loughlin.