Epic Games slashes 1,000 roles amid Fortnite slowdown

Epic Games is reducing its workforce by more than 1,000 employees, stating a drop in Fortnite engagement as the reason. The company highlighted that it is spending more money than its earnings, and reducing jobs comes as a major cost-cutting measure to stay financially stable.

Epic Games Chief Executive Tim Sweeney, in a memo, said, “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.”

“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,” he added.

Sweeney highlighted that Fortnite engagement has been struggling since last year, and that the company has not recovered since. "We've had challenges delivering consistent Fortnite magic," Sweeney said, adding that "market conditions today are the most extreme" since the early days of the company.

The memo further states that the “layoffs aren't related to AI,” and that the technology is helping the company increase productivity. Sweeney pointed to rising competition, weaker consumer spending, and slowing console sales as the reasons.

The company is in the early stages of rebuilding its mobile presence and improving the game for billions of smartphone users. “As the industry's vanguard, we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers,” Sweeney said.

Alongside the layoffs, Fortnite announced it will shut down three of its newer game modes: Rocket Racing, Ballistic, and Festival Battle Stage. Rocket Racing will remain live until October 2026, while Ballistic and Festival Battle Stage will each go offline on April 16 with Fortnite's 40.20 update.

Impacted employees will be getting four months of severance pay, with additional compensation based on tenure. The company further stated that it will continue covering healthcare costs for U.S. staff for six months.