Epic Games revealed plans to eliminate more than 1,000 positions across the organization. In a message sent to staff on Tuesday, CEO Tim Sweeney explained that a decline in Fortnite user involvement beginning in 2025 has led to expenditures outpacing revenue, necessitating substantial reductions to ensure the firm's financial viability.
According to Sweeney, these workforce reductions, paired with over $500 million in efficiencies from vendor contracts, promotional efforts, and unfilled positions, will enhance the company's long-term position. He emphasized that the decisions stem from business needs and have no connection to artificial intelligence initiatives.
This follows a 2023 round of cuts affecting 830 staff members, which represented 16% of the total employees and left approximately 4,000 on the payroll. Based on that figure, the current action appears to remove roughly 25% of the current staff.
Sweeney highlighted that beyond the Fortnite slowdown, Epic faces broader sector pressures, including decelerating expansion, lower consumer expenditures, stricter financial pressures, and rivalry from diverse entertainment options vying for audience time.
On top of these general trends, Epic grapples with internal hurdles. Even as Fortnite ranks among the top-performing titles globally, the firm has struggled to sustain engaging updates each season; efforts to re-enter mobile markets and tailor the game for vast smartphone audiences remain nascent; and pioneering industry fights have incurred significant costs, with Sweeney noting prior expenditures exceeding $100 million on legal disputes like the one with Apple over the App Store.
Looking ahead, Sweeney outlined priorities such as developing captivating Fortnite updates featuring new seasonal themes, mechanics, narratives, and real-time happenings to restore its appeal. He also stressed the urgency of advancing tools for creators during the shift toward Unreal Engine 6.
Affected employees will benefit from severance offering a minimum of four months' salary, scaled up by service duration. The company, which operates privately, will cover health insurance extensions, providing six months for U.S.-based individuals. Additionally, stock option vesting will advance through January 2027, with exercise windows extended by up to two years.
The job reductions come shortly after Epic raised prices for Fortnite's in-game V-Bucks currency, attributing the adjustment to escalating operational expenses and the need to offset those increases.
As part of its restructuring, Epic plans to discontinue three game variants within Fortnite. The Rocket Racing feature, created by Psyonix of Rocket League fame, will end in October. The 5v5 tactical shooter mode known as Fortnite Ballistic, along with Festival Battle Stage—a competitive take on the Fortnite Festival rhythm experience—will cease on April 16. Epic commented on social media that while numerous modes have been launched, some fell short of delivering compelling content to draw and hold substantial audiences.
In its recent annual summary, Epic reported a 4% rise in time spent on non-Epic titles via the Epic Games Store in 2025, yet total playtime across all games dropped compared to the prior year, signaling reduced activity in Fortnite. Store revenue from PC users reached $1.16 billion, up 6% year-over-year, including $400 million from external PC releases. Epic Games Store's vice president and general manager, Steve Allison, shared with Polygon in February that when accounting for Epic's own earnings and the 12% commission on third-party sales, the platform has achieved slight profitability.