Epic Games Slashes Workforce Amid Financial Struggles
Epic Games, the company behind Fortnite, has slashed 16% of its workforce approximately 830 employees after unrealistic expectations of metaverse-inspired revenue caused it to spend “way more” money than it had been earning.
In a memo sent to Epic Games employees on September 29, CEO Tim Sweeney concluded that redundancies are the only way to stabilize the company’s finances and that they must be implemented immediately and on this scale.
Sweeney added, “I had long been optimistic that we could navigate this transition without layoffs, but in hindsight, I see that this was unrealistic.”
Sweeney attributed the company’s recent growth to the Fortnite Creator program, which allows players to create and sell in-game content for a 40% share.However, the shift has resulted in lower margins.
“Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.”
In addition to the previously mentioned layoffs, Sweeney announced that an additional 250 employees would be leaving Epic Games, as the company announced that it would be selling the recently acquired music website Bandcamp and spinning off its marketing company SuperAwesome, a child-safety technology company that joined Epic in 2020.
Notably, soon-to-be-former employees of Epic Games will receive six months of pay and six months of paid healthcare if they reside in the United States, Canada, or Brazil.
In addition to Fortnite, which has approximately 400 million registered users, Epic Games also operates the Unreal Engine, God of War and PlayerUnknown’s Battlegrounds are two games powered by the video game development suite.