Epic Games Confirms Massive Layoffs After Fortnite And Metaverse Spending Spree

News about the layoffs broke on news sites and social media yesterday. One report stated that the company would be letting go of nearly 900 employees. Jason Schreier tweeted about the layoffs, indicating that the laid-off employees will receive six months of severance and health benefits. He added that "rumors were flying as Epic disabled Slack for employees ahead of the news."

Tim Sweeney broke the news of the layoffs to his employees via an email, explaining, "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." He continued, "I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic."

Sweeney wrote that while Fortnite has started growing again, the growth is primarily driven by creator content and has a lower margin business than the company had when Fortnite Battle Royale took off. Part of reducing costs also includes Bandcamp joining Songtradr and SuperAwesome's advertising brand, becoming an independent company under the SuperAwesome brand.

Not all of the laid-off employees posting to social media found the news a terrible thing. Alan Noon posted that while he will look back fondly on his seven years with Epic, he sees a "wealth of opportunity ahead." He went on to invite other affected employees to reach out to him to chat.

Sweeney also addressed the employees who made the cut, remarking, "For those still at Epic, you'll hear from senior leaders about the path forward for your team." He said the company was "cutting costs without breaking development or core lines of businesses so we can continue to focus on our ambitious plans."

The email concerning the Epic Games layoffs noted that around 830 employees had been let go, with about two-thirds of those in teams outside of core development. It also sees about 250 people leaving Epic through its divestitures from Bandcamp and SuperAwesome.