Epic Games, the maker of Fortnite, has announced layoffs affecting more than 1,000 employees, about 20 per cent of its workforce. The decision comes after a sharp decline in the amount of time players are spending on Fortnite, which has reduced company revenues.
Affected employees will receive severance packages that include at least four months of base pay, with additional compensation based on how long they have worked at the company. For US-based staff, healthcare coverage will be extended for six months after departure.
Tim Sweeney, CEO, Epic Games, explained that the downturn in engagement, which began in 2025, has left the company spending far more than it earns. To stabilise finances, Epic is cutting jobs and reducing costs in areas such as contracting, marketing and unfilled positions. Together, these measures are expected to save over $500 million and place the company on firmer ground.
This is the second major round of layoffs in recent years. In 2023, Epic let go of 830 employees, citing similar financial pressures as it invested heavily in expanding Fortnite into a metaverse-style ecosystem. The latest cuts highlight ongoing challenges in balancing ambitious development plans with declining player activity.
Epic’s decision reflects wider pressures in the gaming industry, where companies must adapt to changing player habits and rising costs. While Fortnite remains a major global title, its reduced engagement has forced Epic to rethink its workforce size and spending priorities. The layoffs mark a significant step in the company’s effort to remain financially stable while continuing to develop new gaming and technology initiatives.