What observers say
“We’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” said Tim Sweeney, CEO of Epic Games, as the company announced it would lay off over 1,000 employees. This drastic move comes as Fortnite, once a titan of the gaming world, faces declining engagement and broader challenges within the industry.
The layoffs, which represent about 20% of Epic’s workforce, mark the second major round of job cuts in three years. In September 2023, the company cut approximately 830 jobs, or 16% of its workforce, in a bid to streamline operations. With these latest reductions, Epic Games will have around 4,000 employees remaining.
Despite boasting over 650 million registered players worldwide in 2025, Fortnite’s average playtime has sharply declined, indicating a shift in player engagement. Sweeney acknowledged the pressures the company faces, stating, “Market conditions today are the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side.”
Epic Games is also grappling with the need to transition from Unreal Engine 5 to Unreal Engine 6, a move that requires significant resources. The company is currently in the early stages of returning to mobile gaming after a protracted legal battle with Apple and Google, further complicating its operational landscape.
In an effort to stabilize finances, Epic expects to save $500 million by reducing contracting and marketing expenditures and eliminating some open roles. Sweeney clarified that these layoffs are not related to artificial intelligence, emphasizing the need for the company to adapt to changing market dynamics.
As Epic navigates these turbulent waters, Sweeney reflected on the company’s history, stating, “This isn’t our first time being here. Epic survived upheavals in the 1990s with the move from 2D to 3D with Unreal 1; in the 2000s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite.” This historical perspective underscores the resilience of the company, even as it faces one of its most significant challenges to date.
With the gaming landscape evolving rapidly, Epic Games is not only competing with other video game developers but also with social media and various forms of online entertainment for players’ attention. The outcome of these layoffs and the company’s strategic shifts will be closely monitored by industry observers as Epic seeks to reclaim its position in the market.
Details remain unconfirmed regarding the specific roles affected by the layoffs, but the urgency of the situation is clear as Epic Games aims to emerge stronger from this period of upheaval.