Epic Games, the company behind the Unreal Engine and Fortnite, is laying off around 900 employees which amounts to about 16% of its overall staff. According to a memo sent to employees from CEO Tim Sweeney, the job cuts are in an effort to stabilise the company’s finances due to “unrealistic” expectations for plans to grow Fortnite as a “metaverse-inspired ecosystem” for creators.
Bloomberg was the first to report on the news, stating that Epic Games made the decision to lay off a large amount of its overall work force. Notably, the company states that while Fortnite is beginning to grow again, it’s simply not where it was when the free-to-play Battle Royale took off years ago. Judging by the sound of things, Epic banked heavily on making Fortnite a sustainable endeavour but couldn’t retain the same momentum over the years.
READ MORE – Disney Kicks Off Password Sharing Crackdown For Disney Plus
The memo from Sweeney reads:
“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. While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion.”
Sweeney continues by adding that despite costs being reduced in certain sections such as marketing and events, it still ended up short of financial stability:
“Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics. 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 like marketing and events. 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.”
Epic Games isn’t the only major company to face mass lay offs in the industry. Earlier this year, Microsoft announced its plans to cut over 10,000 jobs including some at Xbox and Bethesda. Dragon Age and Mass Effect developer BioWare laid off around 50 employees back in July in an effort to restructure the teams and streamline the development of future projects.
Source: Bloomberg
