Epic Games, the popular video-gaming company behind Fortnite, has announced that it will be undergoing layoffs due to financial difficulties. In an email to employees, CEO Tim Sweeney revealed that approximately 16% of Epic’s workforce, around 830 workers, would be affected by the layoffs.
Sweeney cited overspending as the main reason for the layoffs, stating, “We’ve been spending way more money than we earn.” He further explained that while Fortnite is experiencing growth again, it is primarily driven by creator content with “significant revenue sharing,” resulting in a lower-margin business. Sweeney admitted that he had hoped to get through the transitional stage without layoffs but realized that it was unrealistic.
In addition to the layoffs, Epic Games plans to sell off Bandcamp, an online audio distribution platform, and spin off most of SuperAwesome, a technology that supports the youth digital media ecosystem. These moves will result in a reduction of approximately 250 workers.
Epic Games, headquartered in Cary, North Carolina, currently has 40 offices worldwide. The impact of the layoffs on the company’s Cary headquarters is still unclear. Epic had been working on plans to build its campus at the old Cary Towne Center, with a scheduled opening in 2025. It remains to be seen how the layoffs may affect these plans.
Despite the difficult decision to lay off employees, Sweeney ensured that Epic Games is committed to supporting those affected. The company is offering a severance package that includes six months of base pay and healthcare coverage for six months in the US, Canada, and Brazil. They are also providing accelerated stock option vesting and extended exercise options, along with benefits such as career transition services and visa support.
Sweeney emphasized that these layoffs are a one-time occurrence and that no additional layoffs are planned. Cary Mayor Harold Weinbrecht expressed disappointment over the layoffs but also expressed pride in having Epic Games located in Cary. The mayor voiced his willingness to support the company in its future plans.