Epic Games Cuts Over 1,000 Jobs Amid Declining Fortnite Engagement

Epic Games, known for Unreal Engine and Fortnite, is set to lay off over 1,000 employees as the player base for Fortnite continues to dwindle.

On March 24, Epic’s CEO Tim Sweeney announced the significant layoffs in a blog post on the company’s official site. He attributed the decision to a decline in Fortnite’s active player count.

“Today we’re laying off over 1,000 Epic employees,” Sweeney stated in a message to staff that was later shared publicly. “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. This layoff, along with over $500 million in identified cost savings from contracting, marketing, and closing some open roles, puts us in a more stable position.”

Those affected by the layoffs will receive four months of base pay, with longer-tenured employees receiving additional severance. Epic will also extend healthcare coverage for six months to those laid off. Sweeney mentioned that a company-wide meeting on Thursday will provide more details about Epic’s future.

Sweeney emphasized that the layoffs are not related to AI, a technology he has previously supported. “Since it’s a thing now, I should note that the layoffs aren’t related to AI,” he said. “To the extent it improves productivity, we want to have as many awesome developers creating great content and tech as we can.”

He also touched on Epic’s ongoing legal battles against tech giants like Google and Apple over in-app purchases and third-party app stores. While Epic has achieved some victories in this long-standing fight, it has come at a cost. Sweeney remarked, “…and in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.”

Sweeney acknowledged the company’s recent challenges in consistently delivering the “Fortnite magic” with each season of the free-to-play battle royale. He outlined plans to focus on creating engaging Fortnite experiences with new seasonal content, gameplay, storylines, and live events. Additionally, he noted the importance of enhancing development tools as the company prepares for the next generation of Unreal Engine, UE6, and expands Fortnite’s UEFN features.

“This isn’t our first time being here,” Sweeney reflected. “Epic survived upheavals in the 1990s with the transition from 2D to 3D with Unreal 1; in the 2000s, we built console games with Gears of War; and in 2012, we moved to online gaming with Paragon and Fortnite. Each time, we rebuilt our foundations and earned a renewed leadership position.”

Earlier this month, Epic increased the prices of Fortnite’s in-game currency, V-Bucks, stating that it was necessary to “help pay the bills.” It seems the company also needed to make some tough staffing decisions.