Epic Games is undertaking significant cost-cutting measures, stating it “is spending far more than it is earning” and must make “drastic cuts to sustain company funding.”
These reductions include workforce adjustments and over $500 million in savings across contract costs, marketing, and open positions, all aimed at stabilizing the company’s financial position.
Epic Games to Reduce Workforce by Over 1,000 Employees
The company explained the decision to reduce its workforce by more than 1,000 employees is due to challenges facing the broader video game industry. These challenges include slowing growth, decreased consumer spending on games, and increased competition from other entertainment mediums.
Epic Games also cited internal hurdles, noting difficulties in consistently delivering compelling content for its flagship title, Fortnite, and ongoing efforts to optimize the game for mobile devices. “Despite Fortnite remaining one of the world’s most popular games, we’ve had challenges delivering consistent Fortnite magic each season; we are still early in our return to mobile and optimizing Fortnite for billions of smartphones worldwide; and as pioneers in the industry, we’ve taken many risks that are now beginning to pay off for us and all developers,” the company stated in a release.
Layoffs at Epic Games Not Related to Artificial Intelligence
Addressing speculation, Epic Games assured employees that the layoffs are not connected to artificial intelligence. “We want as many great engineers as possible creating great content and technology to improve productivity,” the company said.
This is not the first round of layoffs at the company in recent years. In September 2023, Epic Games announced it would eliminate 830 positions, representing approximately 16% of its workforce, citing similar challenges. “I’m sorry to be doing this again,” Epic CEO Tim Sweeney told employees on Tuesday.
“The current market conditions are the most extreme we’ve seen in our 30 years, with massive disruptions in the industry alongside massive opportunities for companies that navigate them successfully,” Sweeney added.
