“Due to significant shifts in our company’s economic structure, we’ve incurred more expenses than revenues,” stated CEO Tim Sweeney, citing the transition to metaverse developments as a major cause. Epic Games, the powerhouse behind Fortnite, confirmed that their ventures into the metaverse led to expenditures surpassing their earnings. As a result, the company made the difficult decision to let go of 16 percent of its workforce, which translates to roughly 830 team members.
In a memo to Epic Games staff on September 29, CEO Tim Sweeney said:
We concluded that layoffs were the only way to go and that doing them now and at this scale would stabilize our finances.
“For a long time, I held the hope that we could navigate this transition without resorting to layoffs. Looking back, that expectation seems naive,” remarked Sweeney.
While Sweeney credits the recent expansion of the company to the Fortnite Creator program—a platform enabling players to design and monetize their in-game content for a 40 percent cut—it has undeniably squeezed the profit margins.
Though the thriving creator ecosystem is a commendable milestone, it undeniably signifies a profound shift in our financial landscape.
Ongoing layoffs at Epic Games
Sweeney said another 250 employees will leave Epic Games as the company announced it would sell its recently acquired music site Bandcamp and shut down SuperAwesome, which joined Epic in 2020.
Notably, Epic Games’ soon-to-be former employees will be offered six months’ salary, and residents of the United States, Canada, and Brazil will also be able to receive six months of paid healthcare.
In addition to Fortnite, which has nearly 400 million registered users, Epic Games also operates the Unreal Engine. The video game development suite powers games like God of War and PlayerUnknown’s Battlegrounds.
