Epic Games, the renowned developer behind blockbuster titles like Fortnite and the Unreal Engine, has confirmed laying off 16% of its workforce, equivalent to 870 employees. This news is another setback for the gaming industry, which has already experienced many layoffs throughout 2023. Alongside the releases, Epic Games is divesting some recent acquisitions and changing its executive leadership.
In an internal email, CEO Tim Sweeney disclosed that the company has been “spending way more money than we earn.” Bloomberg journalist Jason Schreier also reported this information on X. One of the key factors contributing to this financial burden has been the less profitable margins from Fortnite Creator compared to the original Fortnite game. Despite these economic challenges, the company is still recruiting for open positions and has no further layoffs planned.
MORE: Epic boss Tim Sweeney says in email to staff:
– "For a while now, we've been spending way more money than we earn"
– Fortnite Creator profit margins not as big as Fortnite was
– 870 jobs eliminated, but Epic is still hiring
– No more layoffs plannedhttps://t.co/BK1oVRgCba
— Jason Schreier (@jasonschreier) September 28, 2023
To tighten its operational focus, Epic Games is divesting two companies it had previously acquired: music platform Bandcamp, which was bought just last year, and marketing firm Songtradr. Additionally, marketing company SuperAwesome will be spun off to operate independently. These strategic changes aim to streamline operations and recenter the company’s core business objectives.
Earlier this month, the company announced that Donald Mustard would be stepping down as the Chief Creative Officer of Epic Games. He will be replaced by industry veteran Charlie Wen, known for his prior work on the God of War series and various Marvel projects. This shift in leadership could indicate a new operational direction for the company during these challenging times.