Epic Games, the developers of Fortnite and Unreal Engine, is reportedly laying off nearly 900 employees, which accounts for around 16 percent of its entire workforce.
2023 has been one of the most brutal years in the gaming industry for layoffs, with publishers and developers getting rid of employees left right and centre throughout the year. Between Unity, EA, Microsoft, and Sega, just to name a few of the big players, thousands of workers in the gaming industry have found themselves without a job, and it looks like the slew of layoffs isn't slowing down any time soon.
Related: 2023 Has Been A Horrible Year For Gaming
As reported by Bloomberg, the latest gaming industry giant to cut a bunch of its workers is Epic Games, the massive studio behind Fortnite and Unreal Engine. According to Jason Schreier's report, the layoffs will affect 870 employees, which is around 16 percent of Epic Games' workforce. Those hit by the layoffs will receive six months of severance pay and health insurance, as well as accelerated stock vesting.
These huge cuts were announced to the team in a staff memo from Tim Sweeney, Epic Games' CEO, which was obtained and shared by Insider Gaming following the news of the layoffs. In the memo, Sweeney says that the company will be divesting Bandcamp, which it bought at the start of 2022, and "spinning off" most of SuperAwesome, a parental consent management toolkit that Epic aimed to use to "build a wide range of kid-safe services".
"For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators," Sweeney says in the memo. "I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic."
Elsewhere in the memo, Sweeney notes that, while Fortnite is starting to grow again, that growth is mostly because of creator content and revenue sharing, which is a "lower business margin" than when Battle Royale first kicked off and funded Epic's rise. It's pretty poor timing considering Epic also just announced that the price of V-Bucks is going to be rising in the US, after they were previously increased in Canada and the UK earlier this year.
Sweeney also says that Epic has been going through several cost-reducing efforts, including net-zero hiring and lowering operating spend on marketing, but that it hasn't been enough to help the company, leaving layoffs as "the only way". In other news, Bloomberg previously valued Tim Sweeney's wealth at $9.6 billion.
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