Epic Games will lay off more than 1,000 employees as the company deals with a slowdown in Fortnite, according to a message from CEO Tim Sweeney sent to staff and later published publicly. He said the company now spends more than it earns, which forced leadership to take major cost-cutting steps to stabilize the business.
Epic Games confirmed the decision through Tim Sweeney’s note to employees.
“Today we’re laying off over 1,000 Epic employees. I’m sorry we’re here again. 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.”
Sweeney explained that Epic will combine layoffs with over $500 million in cost reductions across contracting, marketing, and unfilled roles. He said these moves aim to put the company in a more stable position as it adjusts to current market conditions.
Sweeney pointed to both internal and broader industry challenges. He said gaming growth has slowed, spending has weakened, and competition for user time has increased. At the same time, Epic has struggled to maintain consistent engagement in Fortnite across seasons, even though the game remains one of the most popular titles globally.
He also noted that Epic is still early in its efforts to bring Fortnite back to mobile devices and optimize it for a global smartphone audience, which adds to ongoing pressure.
CEO says layoffs are not linked to AI
Sweeney directly addressed concerns about artificial intelligence and its impact on jobs at Epic. He said the layoffs have no connection to AI adoption inside the company.
“I should note that the layoffs aren’t related to AI. To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”
Epic plans to focus on improving Fortnite with stronger seasonal updates, better storytelling, and more engaging live events. The company also aims to advance its developer tools as it transitions toward Unreal Engine 6.
Affected employees will receive four months of base pay as severance, with additional benefits for long-serving staff, along with extended healthcare coverage and stock option support.
