Epic Games just laid off over 1,000 employees today as the company blames "the downturn in Fortnite engagement" as a major reason why. The statement issued by Epic's CEO Tim Sweeney says that the company is "spending significantly more" than what they are making. These layoffs are combined with "over $500 million of identified cost savings in contracting, marketing, and closing some open roles."
Today's layoff announcement comes literally less than a week after Epic announced a new season of Fortnite that will once again feature collaborations and special guest stars. The "Fortnite Showdown" season of the ongoing battle royale includes the return of the Foundation, a character that is modeled after and voiced by Dwayne "The Rock" Johnson. The season also includes Bugs Bunny, another collaboration that surely did not come cheap.
Just in 2025 alone, Fortnite had collaborations with numerous characters and celebrities. Some of these collaborations include: The Simpsons, Back to the Future, Kill Bill, Kim Kardaashian, Harry Potter, Aston Martin, Hatsune Miku, SpongeBob SquarePants, DC Comics, Sabrina Carpenter, IShowSpeed, Marvel, Pulp Fiction, 28 Years Later, Adventure Time, The Office, "Ed, Edd, n Eddy," Nike, Power Rangers, Disney, Resident Evil Requiem, Rick and Morty, and more. More recently Chappell Roan and Epic collaborated on a new Season 13 Icon trailer, including a paid Music Pass and Chappell Roan Outfit.
Prior to today's layoffs of over 1,000 employees, Epic Games had another major round of layoffs. In 2023, Epic Games laid off about 16% of their entire workforce. We now know that total to be about 830 employees rather than the 900 employees it was suggested to be at the time.
In today's layoff announcement, Sweeney says that it's expensive being "the industry's vanguard." He continues on to claim that has "taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers." I presume that Sweeney is talking about Epic's lengthy and expensive legal battles with companies such as Google and Apple.
And some of our challenges are unique to Epic. Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we're only in the early stages of returning to mobile and optimizing Fortnite for the world's billions of smartphones; and in being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.
Before today's layoffs, Epic Games employed an estimated 4,300 people.
Those who were laid off today will get a severance package "that includes at least four months of base pay, with more based on tenure." Furthermore, they will also have extended "Epic-paid healthcare coverage." Those who were laid off in the United States will get paid coverage for six months. Epic will "also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years."
