Epic Games CEO said that the recent layoffs are not related to the uptake of artificial intelligence (AI).
Epic Games' Fortnite recently returned to the Google Play Store
Photo Credit: Reuters
Epic Games was involved in a long, drawn-out legal battle with two of the world's biggest tech giants, Apple and Google. The company was contesting the removal of its popular multiplayer game, Fortnite, which was taken off Google's Play Store and Apple's App Store for violating their in-app purchases policies. Now, the game developer has announced it is laying off a large number of employees as its premier game, Fortnite, is still recovering from a downturn in engagement that began last year. Similarly, the game is in its “early stages” of returning to smartphones after a US District Court recently ruled in Epic Games' favour.
On Tuesday, Epic Games' Chief Executive Officer (CEO) Tim Sweeney announced in a blog post that the Fortnite developer is laying off more than 1,000 employees. Sweeney cited multiple reasons for this decision, including industry-wide challenges and unique challenges the company faces. However, the primary reason, according to the Epic Games' CEO, is the downturn in Fortnite engagement, which began in 2025. He said this means the company is spending “significantly more” than it earns.
The fresh layoffs, along with the $500 million (about Rs. 4696.51 crore) of cost savings that Epic Games plans to initiate in terms of contracting, marketing, and closing some open roles, are likely to put the game developer in a more stable position, Sweeney added. Moreover, he said that the company has been facing challenges in delivering “consistent Fortnite magic with every season”.
On the other hand, the industry challenges that the company is facing include “slower growth, weaker spending, and tougher cost economics”, Sweeney highlighted. Moreover, he claims that the current generation consoles are selling relatively less than before, while people have also started moving towards other forms of entertainment.
While the recent wave of layoffs in the tech industry has been fuelled by an unprecedented uptake in AI-powered tools, replacing white-collar employees in corporate offices, Sweeney has confirmed that the layoffs at Epic Games are not “related to AI”. Additionally, the company plans to provide four months of base pay to laid-off employees as part of severance pay. Additionally, Epic Games' outgoing employees will be eligible to receive extended “Epic-paid healthcare coverage” of six months in the US.
However, this is not the first time that Epic Games has announced a massive layoff. In 2023, the Fortnite-maker said that it is laying off about 16 percent of its workforce, cutting about 870 jobs, according to a BBC report. At the time, the company was trying to stabilise its finances, similarly stating that it was spending more money than it was earning.
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