Epic Games has announced the layoff of more than 1,000 employees. This is the second major layoff at the company in three years.
The dismissal is attributed to Fortnite’s declining engagement, which is negatively influencing its finances.
CEO Tim Sweeney announced the news in an internal memo on Tuesday, March 24, stating: “The slowdown in Fortnite engagement that began in 2025 means we are spending significantly more than we earn, and we are having to make significant cuts to maintain the company’s funding. This layoff, along with more than $500 million in cost savings identified in contracts, marketing, and the closure of some open positions, puts us in a more competitive position. stable.”
Sweeney also cites major challenges facing the industry, including “slower growth, lower spending and more difficult cost economics.”
Despite broader issues, the CEO also cited that “current consoles are selling less than previous generation consoles and games are competing for time with other increasingly attractive forms of entertainment.”
The video game company that created the global gaming sensation Fortnite and the popular game engine Unreal Engine is based in Cary, North Carolina.
The challenges facing Epic Games are both industry-wide and company-wide in nature.
Sweeney said the gaming industry’s growth rate has been slower, consumer spending has declined and competition in other forms of entertainment has intensified.
“Current consoles sell less than those of the previous generation and games compete for time with other increasingly attractive forms of entertainment,” he writes.
The company is also in the early stages of returning to mobile platforms after a years-long legal battle with Apple and Google over app store policies.
While explicitly mentioning that the layoffs are not related to AI, he said: “Since it’s a thing now, I should note that the layoffs are not related to AI. To the extent that it improves productivity, we want to have as many awesome developers as possible developing great content and technology.”
The company promised that affected employees would receive severance packages, including four months of base salary and additional amounts based on seniority.
Employees in the United States will also benefit from six months of paid health coverage, accelerated vesting of stock options and extended exercise stock options.
