“The downturn in ‘Fortnite’ engagement that started in 2025 means we’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” said Tim Sweeney, CEO of Epic Games, as he announced the company’s decision to lay off over 1,000 employees. This reduction represents approximately 20% of the company’s workforce, which will leave around 4,000 employees remaining after the cuts.
The layoffs come as Epic Games seeks to cut $500 million in costs, a response to the significant decline in player engagement with Fortnite, which had registered 650 million players in 2025. The company had previously faced challenges in delivering consistent content for the game and optimizing it for mobile platforms, which has contributed to the current situation.
In September 2023, Epic Games had already eliminated about 830 jobs, citing a broader industry slowdown as a factor behind those cuts. The current layoffs further highlight the ongoing struggles within the gaming sector, as the latest console generation has been selling fewer units than its predecessor, impacting revenue streams for companies like Epic.
Despite the painful decision to part with so many talented individuals, Sweeney emphasized the need for the company to adapt to the changing market conditions. “It is very painful to part with so many talented people,” he stated, acknowledging the impact of the layoffs on the workforce.
What observers say
Market conditions have shifted dramatically, with Sweeney comparing the current environment to earlier challenging periods in the company’s history. “Market conditions today are the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side,” he remarked. This perspective reflects a broader sentiment within the industry as companies navigate through economic uncertainties and changing consumer preferences.
In addition to the layoffs, Epic Games is preparing for a transition from Unreal Engine 5 to Unreal Engine 6, which may also influence its future direction and staffing needs. The company is also engaged in ongoing antitrust lawsuits with Apple and Google over in-app payment fees, adding another layer of complexity to its operational landscape.
As Epic Games moves forward, the focus will likely be on rebuilding its foundations and finding new avenues for growth. Sweeney noted, “Each time, we rebuilt our foundations and earned a renewed leadership position,” suggesting that the company is determined to emerge stronger from this challenging period. While the immediate future may be uncertain, the potential for recovery and innovation remains a key aspect of Epic’s strategy.
Details remain unconfirmed regarding the specific departments affected by the layoffs, but the overall impact on the company and its remaining employees is expected to be significant as Epic navigates these turbulent times.
