Epic lay off 830 people thanks to "unrealistic" metaverse ambitions
Unreal Engine and Fortnite publisher Epic Games are making an absolutely enormous round of job cuts. As announced by founder and CEO Tim Sweeney in an email to staff today, the company will lay off approximately 830 people, totalling “around 16%” of their workforce, in order to achieve “financial sustainability” following a period of heavy investment and lower-than-hoped returns from Fortnite.
“For a while now, we've been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney writes in the letter. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.
“While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.
“Epic folks around the world have been making ongoing efforts to reduce costs, including moving to net zero hiring and cutting operating spend on things like marketing and events. But we still ended up far short of financial sustainability. We concluded that layoffs are the only way, and that doing them now and on this scale will stabilize our finances.”
Two-thirds of the layoffs are in teams “outside of core development”, Sweeney added.
As part of their bid to cut costs, Epic will also divest from Bandcamp, the audio distribution platform they acquired in 2022, and are spinning off most of SuperAwesome, a company that builds
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