Fortnite and Unreal Engine creator Epic Games will lay off 830 employees, or around 16% of its workforce.
In addition to the massive round of layoffs, Epic will also divest some of its recent purchases, including music service platform Bandcamp, which it acquired in 2022, and a kid-safe technology company called SuperAwesome. Around 250 people will be affected as a result of the divestitures.
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In a memo by Epic CEO Tim Sweeney, he explains that despite attempting to cut operating costs over many years, the company came up short of being financially sustainable. “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.”
“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 marketing and events,” he added. “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.”
Sweeney says that outgoing employees will be offered a severance package that includes six months of base pay and Epic-paid healthcare in some regions. Employees with stock options will also be given two additional years to exercise them.
Epic Games was founded in 1991 and is best known for creating the Unreal Engine, which continues to be one of the most popular and most used gaming engines by developers. It also created popular games like Unreal and the first four entries in the Gears of War series; however, the publisher is now mostly known for creating the mega-hit free-to-play battle royale game Fortnite. The latter, in particular, has been an extremely profitable venture for the company, racking up over $9 billion in two years since 2021, and currently has over 400 million registered users.
Mufaddal Fakhruddin has been writing about games and technology for the past 15 years. He has lost count as to how many reviews he has written over the years, but he is sure headphone reviews make up at least 70% of that.