Epic Games, maker of the smash hit Fortnite, isn’t immune to the troubles of the video game industry. The publisher announced Thursday it was laying off 16% of its staff, which works out to 830 people.
“We’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” wrote founder and CEO Tim Sweeney in a note to employees. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Workers impacted by the cuts will receive six months of base pay as well as healthcare coverage. The company is additionally accelerating employees’ stock option-vesting schedule through the end of the year (and giving them two additional years to exercise the options).
As part of the cutbacks, Epic is also selling off audio distribution platform Bandcamp, which it bought last March, to Songtradr, a music marketplace company. And its SuperAwesome advertising company will become an independent business, run by its current leadership team. Those moves will result in 250 people leaving Epic via divestitures.
“Saying goodbye to people who have helped build Epic is a terrible experience for all,” wrote Sweeney. “The entire goal of this process was to make our cost structure more sustainable and we believe that we have achieved this.”
Epic does not plan to make any further layoffs, it said. It also plans to continue hiring for critical roles.
Further, the company said it is not cutting any core businesses and “must succeed initiatives,” such as the next Fortnite season and Fortnite Chapter 5 will not see any delays. It plans to continue investing in other holdings, including Rocket League, Fall Guys, the Epic Games Store, and more.
Despite the cuts, Sweeney said Epic also plans to continue moving ahead with its fight against Apple and Google, though he did say the company has “been taking steps to reduce our legal expenses.” Earlier Thursday, Epic asked the U.S. Supreme Court to review a lower court’s antitrust ruling. (The company has long argued Apple holds an unfair monopoly on the mobile app space.)
The layoffs at Epic follow some high-profile departures from the company. Donald Mustard, who has overseen Fortnite since its start seven years ago, stepped down earlier this month. And Joe Kreiner, Epic’s VP of business development, announced his retirement on September 18.
Fortnite remains one of the most popular titles in the video game industry, with over 400 million users, though its popularity has ebbed some in the past year or two. Epic also earns income from licensing its Unreal Engine, which powers many popular video game titles, including Microsoft’s Sea of Thieves and Gearbox Software’s Borderlands franchise.
The layoffs at Epic are the latest in a string of cutbacks by game makers throughout the industry. Last month, Embracer Group AB, which owns several studios, shut down Volition, maker of the Saints Row games. Roblox cut 30 jobs three days ago. Unity reduced its workforce by between 200 and 300 workers in July. And Pokemon Go creator Niantic laid off 230 people in June.
Loading the player...
Dubai Tourism CEO Issam Kazim on the future of travel | Trailer