Epic cuts 1,000+ jobs amid financial struggles, seeks half-billion-dollar cost savings

[Shawn Knight]

In brief: Epic Games is saying goodbye to more than 1,000 employees as part of an effort to keep the company afloat. CEO Tim Sweeney on Tuesday shared a note sent to staffers outlining the changes and why they are necessary. The executive primarily blamed a downturn in Fortnite engagement that started in 2025 for the current situation, which left the company spending significantly more money than they are bringing in.

Sweeney also pointed to industry-wide changes including slower growth, weaker spending on games and consoles, tougher cost economics, and new forms of entertainment competing for gamers' attention as additional factors hurting their business.

Some of Epic's issues, Sweeney added, are uniquely their own. The company is still in the early stages of bringing Fortnite back to mobile, and it's also been a struggle to deliver what Sweeney called consistent Fortnite magic with each and every season.

To be clear, Epic says the layoffs aren't related to the AI revolution that has already ravaged other industries. Sweeney said that to the extent it improves productivity, they want to have as many awesome developers developing great content and tech as they can.

Epic said outgoing team members will receive a severance package that includes at least four months of base pay, and more based on tenure. Those affected will also receive extended healthcare coverage and realize accelerated stock option vesting.

The good news for Epic is this isn't their first rodeo. They successfully navigated the transition from 2D to 3D in the 90s, adapted to console games in the 2000s, and launched Fortnite in the 2010s.

Moving forward, Sweeney said Epic needs to get back to building "awesome" Fortnite experiences complete with fresh seasonal content as well as engaging stories and gameplay, plus more live events. He also wants the company to enhance its developer tools with a focus on capability and stability as they make the transition from Unreal Engine 5 and UEFN to Unreal Engine 6. Sweeney even teased "huge launch plans" towards the end of the year, but didn't elaborate further.

Image credit: App Hunters

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Epic cuts 1,000+ jobs amid financial struggles, seeks half-billion-dollar cost savings

 

[KedsDead]

So.. is UE6 the unbroken version of UE5, or a worse version of UE5 labeled as UE6?

 

[maxxcool7421]

Wants to save 500 million dollars... fires people who make the most profitable efforts in the company... yeah that tracks

 

[GodisanAtheist]

What a horrible time to lose a job, especially in tech.

 

[pnntmp]

It's shocking he was honest to admit the actual reasons, instead of resorting to "we are becoming more efficient with AI". Pretty much any company that had to lay off people resorted to the AI lie.

 

[bviktor]

Wait, I thought Tim Sweeney is the knows-best man when it comes to financing, especially when it comes to store fees? Even though their own store has been doing nothing but bleeding money, but still, he knows best because reasons?

 

[p51d007]

Gotta keep that stock price up! CEO's salary depends on it ya know.

 

[CrisisDog]

Got to keep those shareholders happy, see the same thing at my job. For someone like myself who just cannot get into Fortnite, Epic kinda has / had this other IP that seemed to be enjoyed by the older generation. Sad that it has been totally ignored. In other news, UT2004 is now getting modernized by the OldUnreal team, so “Yaaay!”

 

[Theinsanegamer]

Gotta keep that stock price up! CEO's salary depends on it ya know.

Got to keep those shareholders happy, see the same thing at my job. For someone like myself who just cannot get into Fortnite, Epic kinda has / had this other IP that seemed to be enjoyed by the older generation. Sad that it has been totally ignored. In other news, UT2004 is now getting modernized by the OldUnreal team, so “Yaaay!”

"The executive primarily blamed a downturn in Fortnite engagement that started in 2025 for the current situation, which left the company spending significantly more money than they are bringing in."

As much as we like to scream "CORPO BAD", some reading may help out. If they are losing money due to a downturn in spending, you can only sustain that for so long, and it sounds like they sustained it for over a year.

What a horrible time to lose a job, especially in tech.

The whole gaming industry is going through its second crash. Investment in gaming companies effectively flatlined in 2024 after a long track record of failure and lots of these companies are highly dependent on continuous funding to support their bloated staff counts.

It's gonna keep getting worse. 1/3rd of the western gaming industry ahs been laid off so far and I'd bet that increases to 2/3rds over the next year or two.

 

[ScottSoapbox]

"The executive primarily blamed a downturn in Fortnite engagement that started in 2025 for the current situation, which left the company spending significantly more money than they are bringing in."

As much as we like to scream "CORPO BAD", some reading may help out. If they are losing money due to a downturn in spending, you can only sustain that for so long, and it sounds like they sustained it for over a year.

Agreed.

If your job is making Fortnite content and Fortnite content sales are down - guess what happens next.

 

[maxxcool7421]

What a horrible time to lose a job, especially in tech.

from here on out we will lose another 3-4 million tech jobs in 2026 with AI getting the blame for fake-ai-culling, and real AI replacements. Tech jobs are dead. in the next 10 years AI will replace everyone but specific roles..

The tipping point will be when the headlines start rolling about how AI wrote a vastly more efficient RISC or x64 codebase that runs with higher sustained IPC .. after that humans in IT will only exist to reboot, plug in and recycle systems... there wont even be managers or executives in a decade.

 

[JaredTheDragon]

Imagine having a pre-teen multiplayer game as your only focus and portfolio endeavor and trying to stay afloat in the video game industry. Clown shoes.

 

[MSIGamer]

Got to keep those shareholders happy, see the same thing at my job. For someone like myself who just cannot get into Fortnite, Epic kinda has / had this other IP that seemed to be enjoyed by the older generation. Sad that it has been totally ignored. In other news, UT2004 is now getting modernized by the OldUnreal team, so “Yaaay!”

Their own engine is no longer fit to make a meaningful first person shooter.
High fps: no.
Low latency: no.
Crisp graphics: no.

Or they'll have to abandon the path they're pushing so hard (lumen, Nanite, TAA, deferred rendering), which doesn't seem like it's going to happen soon.

 

[Puiu]

Didn't Epic have record revenue in 2025 and projected the 2026 revenue to grow further to 6.2 billion? wtf are these layoffs?

 

[Beerfloat]

Imagine having a pre-teen multiplayer game as your only focus and portfolio endeavor and trying to stay afloat in the video game industry. Clown shoes.

There's also the Unreal engine which is pretty dominant and the game store. It's hardly just Fortnite.

 

[gamerk2]

The whole gaming industry is going through its second crash. Investment in gaming companies effectively flatlined in 2024 after a long track record of failure and lots of these companies are highly dependent on continuous funding to support their bloated staff counts.

It's gonna keep getting worse. 1/3rd of the western gaming industry ahs been laid off so far and I'd bet that increases to 2/3rds over the next year or two.

Its been heading that way for a while, with all the acquisitions leading to bloated companies that simply can not compete at a reasonable cost. Ubisoft is probably going to collapse within the next year or two, which will probably be the awakening moment for the industry.

 

[ScottSoapbox]

For reference, Epic had 5200 employees before their 2023 layoff (~800 people) but were back to 5000 before this layoff of 1000. So this represents a 20% reduction, but also 600 employees were hired recently.

 

[daffy duck]

Henceforth he'll be known ans Sweeny Todd.

 

[Gravitytr1]

Usually, if there's worse demand that means u need to ramp up quality and content

Not make urself less competitive

We live in clown world