Epic lays off 830 employees after “spending way more money than we earn”
Epic Games has announced that it is laying off around 830 employees – around 16% of the company’s total workforce – and splitting off recent acquisitions, with Epic CEO Tim Sweeney admitting that they have been “spending way more money than we earn.”
All affected employees will received a severance package of six months pay, and Epic-paid healthcare in the US, Canada and Brazil.
In addition to the employees being let go from Epic Games and their network of studios, they will be spinning off the advertising side of “kidtech” specialists SuperAwesome, which they had acquired in late 2020 – Epic will keep the parent verification and consent management tools – and are selling off online music store Bandcamp, which it had acquired in March last year, to music licensing platform Songtradr.
In a publicly posted letter to employees, Sweeney said, “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. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Through the full letter, Sweeney notes that while Fortnite has started to grow as a game and platform once again, this is largely off the back of creator content, which features revenue sharing. This impacts on Epic’s margins compared to Fortnite’s season passes and cosmetic skins sales.
The decision to make layoffs has come following moves to stop the company headcount growing through “net zero hiring” and cutting down on marketing and events costs. It sees Epic falling in with tech industry trends of the past year, having made massive acquisitions and gone on hiring sprees
Read more on thesixthaxis.com
