CEO Tim Sweeney cited the shift towards metaverse initiatives as a significant factor behind the financial strain.
Epic Games, known for its blockbuster game Fortnite, acknowledged that their foray into the metaverse resulted in expenses outpacing income. Consequently, the company faced the tough decision to dismiss 16 percent of its workforce, amounting to approximately 830 employees.
In a communication to Epic Games staff on September 29, CEO Tim Sweeney explained:
We determined that layoffs were unavoidable and that implementing them now, on this scale, would secure our financial stability.
“I had maintained hope for a long time that we could manage this transition without needing to lay off staff. In hindsight, that hope appears overly optimistic,” Sweeney reflected.
While Sweeney attributes the company’s recent growth to the Fortnite Creator program—a platform that allows players to create and earn from their in-game content with a 40 percent revenue share—it has significantly impacted profit margins.
Despite the success of the creator ecosystem, it unmistakably marks a significant shift in our economic framework.
Ongoing layoffs at Epic Games
Sweeney announced that an additional 250 employees would be departing Epic Games, following the company’s decision to sell its recently acquired music platform, Bandcamp, and to discontinue SuperAwesome, which became a part of Epic in 2020.
Significantly, the outgoing employees of Epic Games will be provided with six months’ worth of salary. Furthermore, those residing in the United States, Canada, and Brazil will be eligible for six months of paid healthcare.
Beyond Fortnite, which boasts nearly 400 million registered users, Epic Games also manages the Unreal Engine. This video game development suite is utilized in the creation of titles such as God of War and PlayerUnknown’s Battlegrounds.
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