Epic Games has announced that it will lay off around 16 percent of its workforce, resulting in around 830 employees losing their jobs.
In a statement released by Epic President Tim Sweeney, he explains the layoffs as a cost-cutting measure that includes divesting Bandcamp, which it acquired last year, and spinning off advertising platform SuperAwesome into an independent company. Epic acquired SuperAwesome in 2020. As a result of these divestitures, 250 people will be leaving Epic.
“For some time now, we’ve been spending far more money than we make, investing in Epic’s next evolution and evolving Fortnite into a metaverse-inspired developer ecosystem,” Sweeney wrote in his statement. “I have long been optimistic that we could make this transition without layoffs, but in retrospect I see that was unrealistic.”
Sweeney then explains that despite cost-cutting measures, such as reducing marketing and events, Epic is still unable to achieve financial stability and that layoffs are the only solution. Sweeney states that two-thirds of the layoffs come from teams outside of core development and that these departures will not come at the expense of game development or business units. Sweeney also says this will be the only round of layoffs and that Epic will continue to hire employees for “critical roles.” Content development for titles such as Fortnite, Fall Guys and Rocket League will continue as planned.
Affected employees will receive severance packages equal to six months of base pay and six months of Epic-paid health care for employees in the U.S., Canada and Brazil. Epic is offering employees the opportunity to accelerate stock option vesting schedules through the end of 2024 and add two additional years to use these options starting today. US employees can also roll over any unearned profit sharing from their 401k. Finally, Epic will offer career transition services and visa assistance.
A large company meeting is planned for next month to discuss the company’s efforts and priorities. These layoffs come just weeks after Donald Mustard, Epic’s chief creative officer and Fortnite boss, announced his resignation.