‘Fortnite’ Developer Epic Games To Axe Around 830 Employees

Epic Games has announced a workforce reduction affecting approximately 870 employees, which accounts for 16% of its staff, as reported by Bloomberg. Alongside these layoffs, the company revealed its intention to divest Bandcamp, an online audio distribution platform it acquired last year, and to spin off a significant portion of SuperAwesome, a child-friendly technology development firm that Epic acquired in 2020.

In a memo addressed to the employees, Epic Games CEO Tim Sweeney expressed the necessity of these measures. He cited the company’s ongoing spending exceeding its revenue, primarily due to investments in Epic’s evolution and the growth of Fortnite as a metaverse-inspired ecosystem for creators. Sweeney acknowledged that he had been optimistic about navigating this transition without layoffs but now recognizes the need for such actions.

Despite prior efforts to curtail costs, including a shift to net zero hiring and reductions in operating expenses for marketing and events, Epic Games found itself falling short of achieving financial sustainability. Consequently, the decision was made to conduct layoffs as a means of stabilizing the company’s financial position.

Regarding Bandcamp and SuperAwesome, Bandcamp will join forces with Songtradr, a music marketplace company, while SuperAwesome’s advertising division will become an independent entity under the SuperAwesome brand, led by its current CEO, Kate O’Loughlin.

Sweeney emphasized that these cost-cutting measures would not disrupt the company’s core development or primary business operations. Epic Games remains committed to its ambitious plans and is willing to adjust release schedules for some projects if it means maintaining the ability to achieve its long-term goals and become a leading metaverse company.

The company’s immediate focus remains on delivering key initiatives, including the upcoming Fortnite Season and Fortnite Chapter 5, which includes Del Mar, Sparks, and Juno. Epic has confirmed that the release schedules for these projects will proceed as planned.

In addition to these internal changes, Epic Games recently announced that it will raise the prices of Fortnite V-Bucks in the United States and several other countries, citing economic factors such as inflation and currency fluctuations as the reasons for the price increase, set to take effect on October 27.

The layoffs coincide with Epic’s filing of a cert petition with the Supreme Court, requesting a review of a 2021 ruling pertaining to Apple’s App Store policies. Should the Supreme Court decide to hear the case, it would reopen the legal dispute between Epic and Apple, which commenced in August 2020. Epic emphasized its commitment to challenging distribution monopolies and taxes imposed by Apple and Google, with the aim of fostering a thriving metaverse and creating opportunities for Epic and other developers.