“We’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” said Tim Sweeney, CEO of Epic Games, as the company announced it would lay off more than 1,000 employees. This decision comes in response to declining engagement with Fortnite and broader challenges within the gaming industry.
The layoffs represent approximately 20% of Epic’s workforce, which will be reduced to around 4,000 employees following this round of cuts. This marks Epic’s second significant layoff in three years, having previously cut about 830 jobs, or roughly 16% of its workforce, in September 2023.
Despite having over 650 million registered players worldwide in 2025, Fortnite’s average playtime has sharply declined, prompting the company to reassess its operational costs. Epic Games expects to save $500 million by reducing contracting and marketing expenditures, as well as eliminating some open roles.
In a statement, Sweeney clarified that the layoffs are not related to artificial intelligence, emphasizing the need for the company to adapt to current market conditions. “Market conditions today are the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side,” he noted.
Epic Games has faced ongoing challenges in delivering consistent content for Fortnite, as it competes with social media and other forms of online entertainment for players’ attention. The company is also in the early stages of returning to mobile gaming after a protracted legal battle with Apple and Google.
What observers say
Reflecting on the company’s history, Sweeney remarked, “This isn’t our first time being here. Epic survived upheavals in the 1990s with the move from 2D to 3D with Unreal 1; in the 2000s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite.” This historical perspective underscores Epic’s resilience in navigating industry shifts.
As the company prepares to transition from Unreal Engine 5 to Unreal Engine 6, the future remains uncertain for many affected employees. Those laid off will receive four months of base pay as part of their severance package. Details remain unconfirmed regarding any additional support or resources that may be offered to assist them during this transition.
