Epic Games Is Laying Off 16% of Employees
Epic Games, creator of the popular game Fortnite, is laying off 830 of its employees.
“While ‘Fortnite’ is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when ‘Fortnite Battle Royale’ took off,” CEO Tim Sweeney said in an email to employees. He stated that two-thirds of those employees were outside of core development teams and that the aim of the layoffs were to help Epic Games “get to the other side of profitability.”
According to Alex Heath, a reporter for The Verge, the company was seeking investment and decided to use layoffs as a means to reduce expenses to make it easier to raise funds. Sweeney also said that the company was “spending way more money than we earn.” He concluded with not an apology, but a statement to employees that his “optimism” that such spending would not result in layoffs was “unrealistic.”
Many industries are struggling due to inflation, but the video game industry in particular has met a slowdown due to gamers becoming more selective in choosing what titles to spend their money on as prices continue to rise.
Not helping things is the fact that Epic has been in a legal battle with Apple since 2020 due to Epic’s claim that Apple’s practice of charging up to 30% commissions on in-app payments on iPhones and other devices violated U.S. antitrust rules.
Sweeney also reports that the company intends to sell Bandcamp — an independent music storefront company they acquired just last year and who recently unionized — and spin off SuperAwesome, a “kid-tech” company that focuses on creating safe online experiences for kids.
All these decisions have damaged Epic’s reputation in the eyes of many, and they are not the only ones. Other high profile companies such as Activision Blizzard and BioWare have also laid off a significant amount of employees, and others like Sega have canceled projects before launch. All this alongside the Unity price model backlash and the vote to strike, and the video game industry is more turbulent now than ever.
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Epic Games, creator of the popular game Fortnite, is laying off 830 of its employees.
“While ‘Fortnite’ is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when ‘Fortnite Battle Royale’ took off,” CEO Tim Sweeney said in an email to employees. He stated that two-thirds of those employees were outside of core development teams and that the aim of the layoffs were to help Epic Games “get to the other side of profitability.”
According to Alex Heath, a reporter for The Verge, the company was seeking investment and decided to use layoffs as a means to reduce expenses to make it easier to raise funds. Sweeney also said that the company was “spending way more money than we earn.” He concluded with not an apology, but a statement to employees that his “optimism” that such spending would not result in layoffs was “unrealistic.”
Many industries are struggling due to inflation, but the video game industry in particular has met a slowdown due to gamers becoming more selective in choosing what titles to spend their money on as prices continue to rise.
Not helping things is the fact that Epic has been in a legal battle with Apple since 2020 due to Epic’s claim that Apple’s practice of charging up to 30% commissions on in-app payments on iPhones and other devices violated U.S. antitrust rules.
Sweeney also reports that the company intends to sell Bandcamp — an independent music storefront company they acquired just last year and who recently unionized — and spin off SuperAwesome, a “kid-tech” company that focuses on creating safe online experiences for kids.
All these decisions have damaged Epic’s reputation in the eyes of many, and they are not the only ones. Other high profile companies such as Activision Blizzard and BioWare have also laid off a significant amount of employees, and others like Sega have canceled projects before launch. All this alongside the Unity price model backlash and the vote to strike, and the video game industry is more turbulent now than ever.
Share:
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