Epic Games Inc. is cutting more than 1,000 jobs across the company amid a downturn in engagement with the online video game Fortnite over the past year.
“We're spending significantly more than we're making, and we have to make major cuts to keep the company funded,” Chief Executive Officer Tim Sweeney said in a blog post on Tuesday. “This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place.”
This is Epic's second major round of layoffs in three years. In September 2023, the Cary, North Carolina-based company eliminated 830 employees for similar reasons.
Fortnite, one of the most popular video games on the market since it burst onto the scene in 2017, has recently struggled to deliver “consistent Fortnite magic,” Sweeney wrote in the blog post. He noted that “market conditions today are the most extreme we've seen since those early days.”
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Sweeney cited several issues affecting the broader video-game industry, such as rising competition, weaker consumer spending and slower console sales. The industry has shed tens of thousands of jobs over the last three years, and rising development budgets, lower sales and an oversaturated market have led to stalled growth at many gaming companies.
But Sweeney also acknowledged that some of Epic's struggles are unique to the company. Last week, Epic raised the prices of Fortnite's in-game currency, saying “the cost of running Fortnite has gone up a lot and we're raising prices to help pay the bills.”
For “live-service” games like Fortnite, which are continually updated and rely on player retention to generate revenue, a few slow months or unpopular updates can be catastrophic. In the blog post, Sweeney said that the company will double down on the game and look to “build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events.”
Walt Disney Co. invested $1.5 billion in Epic in 2024 as part of a collaboration that will incorporate properties like Star Wars, Marvel and Avatar into the Fortnite universe.
“We'll be kicking off the next generation of Epic with huge launch plans towards the end of the year,” Sweeney said in the post.
Fortnite still ranks among players' favorite games, topping the charts for monthly active users across PlayStation and Xbox consoles in the US in February, according to Mat Piscatella, an analyst at video-game market research firm Circana. But average engagement time has fallen, Piscatella said, writing on Linkedin that the average PlayStation player spent 16 hours on Fortnite last month, a drop from 21 hours in February 2025. Xbox players averaged 15 hours compared with 19 hours the previous year.
Sweeney has also spent the past several years clashing with Apple Inc. and Alphabet Inc.'s Google over fees required for in-app purchases in their mobile app stores. During years of antitrust battles, Fortnite wasn't available on those app stores.
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The company said it's only now “in the early stages of returning to mobile and optimizing Fortnite for the world's billions of smartphones.” In confronting the tech giants, Epic has “taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers,” Sweeney wrote in the post.
Sweeney emphasized that the job cuts aren't related to artificial intelligence. The company said it will offer at least four months of severance to affected employees, will accelerate stock options and extend health insurance benefits for six months.
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