Fortnite maker Epic Games is laying off 830 employees

Chrissy CallahanSeptember 29, 2023

Epic Games, the North Carolina-based studio behind Fortnite and Unreal Engine, has suffered a significant wave of layoffs.

As Bloomberg first reported, Epic Games is laying off 830 employees, or around 16 percent of its workforce. Epic Games shared a memo that CEO Tim Sweeney sent to employees in a new blog post.

Separately, Epic is “divesting” music services platform Bandcamp and will spin off most of SuperAwesome, a child-safe technology company. Both were acquired by Epic Games in 2022 and 2020 respectively. The Bandcamp and SuperAwesome divestitures mean around 250 people are leaving Epic.

You can read the full memo below.

Hello everybody,

As we previously shared, we are laying off approximately 16% of Epic employees. We are selling Bandcamp and spinning off most of SuperAwesome.

For some time now, we’ve been spending far more money than we make, investing in Epic’s next evolution and building Fortnite into a metaverse-inspired developer ecosystem. For a long time I was optimistic that we could make this transition without layoffs, but in retrospect I see that was unrealistic.

As Fortnite begins to grow again, the growth will be driven primarily by content from creators with significant revenue share. This is a business with lower margins than when Fortnite Battle Royale launched and began funding our expansion. The success with the Creator ecosystem is a major achievement, but it also represents a major structural change in our economy.

Epic people around the world are making ongoing efforts to reduce costs, including moving to net-zero hiring and cutting operating expenses on things like marketing and events. But in the end, we are still far from financial sustainability. We have come to the conclusion that layoffs are the only way forward and that if we do them now and at this scale, we can stabilize our finances.

We are also making some divestitures. Bandcamp joins Songtradr, a music marketplace company that supports artists. SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand under the leadership of current CEO Kate O’Loughlin. Kids Web Services (KWS), the parental verification and consent management toolset, remains part of Epic.

Saying goodbye to people who helped build Epic is a terrible experience for everyone. The consolation is that we have sufficient resources to support laid-off employees: we offer a severance package that includes six months of base salary and, in the US/Canada/Brazil, six months of Epic-paid healthcare. We are offering to accelerate the stock options exercise schedule to the end of 2024 and are providing two additional years to exercise the options starting today. In the US, we also offer to transfer any unearned profit sharing from your 401k account. And where we can, we offer services including career transition services and visa support.

Those still at Epic will hear from senior leaders about their team’s path forward. Epic’s future prospects are good. We offer amazing gaming experiences across multiple platforms. We’ve built the best engine in the world and will be hosting Unreal Fest next week to bring the community together and highlight the things they’re building with Unreal Engine and UEFN. The developers are creating a living edifice for the Fortnite ecosystem, with time remaining in third-party games now exceeding that of first-party games.

We are reducing costs without affecting development or our core businesses so that we can continue to focus on our ambitious plans. About two-thirds of the layoffs occurred in teams outside of core development. Some of our products and initiatives will be delivered on time, but others may not be delivered when scheduled due to current insufficient resources. We are comfortable with the schedule compromise if it means we retain our ability to achieve our goals, reach the other side of profitability and become a leading Metaverse company.

-Tim

Meanwhile, several employees of Epic-owned Mediatonic, the developer of Fall Guys, have announced on the social media platform X (formerly Twitter) that they have been laid off as part of the layoffs.

So yeah, it looks like I’m going to be fired. If anyone has any level design roles, I would really appreciate any pointers or connections ♥️

— Max Boyle 🏳️‍🌈 (@BoyleInThe_Bag) September 28, 2023

Unfortunately, today I am one of the people affected by the layoffs at Epic. I am absolutely devastated to leave behind so many amazing Mediatonic colleagues that I loved.

So: the job search begins! If you need an experienced writer or narrative designer, please contact us 🙂

– Ed Fear (@edfear) September 28, 2023

Hello! I am one of the lucky people affected by layoffs 🙂 I am looking for positions in design/level design (I have experience in both areas). If anyone has connections/links/recommendations I would be grateful 🩷

– Dorian ❄️ (@doriandotexe) September 28, 2023

Hello everyone! As you’ve probably already seen, I’m now looking for work! My expertise lies in Quality Assurance Engineer, Automation and SDET based roles. Please contact me if you have any openings for me!

— Adrian Bennett (@Volks42) September 28, 2023

Unfortunately, I am one of the unlucky people affected by the layoffs at Epic today.

If anyone is looking for an experienced art lead or generalist, ideally for stylized games, please give me a call ❤️🙏

— Stef (@stefscribbles) September 28, 2023

Founded in 1991, Epic Games is best known for developing the Unreal Engine and developing a long list of games including Unreal, the first four entries in the Gears of War series, and most notably the free-to-play battle royale game Fortnite .

Fortnite in particular has become an extremely profitable game for Epic. In 2021, Fortnite was reported to have generated $9 billion in two years and had 400 million registered users at the time.

News of the layoffs comes a day after Epic announced a price increase for Fortnite V-Bucks, and just weeks after Epic’s chief Fortnite architect Donald Mustard announced his resignation. Charlie Wen, a Marvel veteran who helped create God of War protagonist Kratos, will take his place.

Epic Games has been embroiled in a legal battle with tech giants Apple and Google. However, Epic lost the case in 2021 as the ruling was upheld by the US Court of Appeals for the Ninth Circuit earlier this year. Epic recently asked the US Supreme Court to weigh in on the antitrust case.

Taylor is a reporter at IGN. You can follow her on Twitter @TayNixster.

Chrissy CallahanSeptember 29, 2023

Chrissy Callahan

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