Epic Games lays off over 1,000 employees amid declining interest in Fortnite

A troubling wave of mass layoffs in the gaming industry continues. On March 24, Epic Games announced large-scale job cuts affecting over a thousand employees. The announcement was made by CEO Tim Sweeney in an internal memo that later surfaced in the media.

The layoffs are linked to a decline in player activity in Fortnite, which began in 2025. According to Sweeney, the company is spending significantly more than it earns and is now implementing major cost-cutting measures to stabilize its financial situation. As part of these efforts, Epic aims to save over $500 million by optimizing contracts, reducing marketing expenses, and closing certain open positions.

Sweeney also noted that many of the challenges are industry-wide: slower growth, reduced player spending, and tougher economic conditions. He added that current consoles are selling worse than the previous generation, while games increasingly compete with other forms of entertainment for users’ time.

At the same time, Epic is facing its own unique challenges:

“Despite Fortnite remaining one of the most successful games in the world, it has been difficult to consistently deliver the ‘Fortnite magic’ every season. We are still in the early stages of returning to mobile platforms and optimizing the game for billions of smartphones.”

Sweeney also emphasized that the layoffs are not related to artificial intelligence:

“As for AI, we want as many talented developers as possible creating great content and technology.”

Looking ahead, the company has outlined its priorities: continued development of Fortnite with new seasonal content and live events, advancing its development tools as it transitions from Unreal Engine 5 and UEFN toward Unreal Engine 6, and preparing for “next-generation Epic” launches by the end of the year.

Epic Games has gone through major transformations before—shifting from 2D to 3D in the 1990s with Unreal, expanding into consoles in the 2000s with Gears of War, and later pivoting toward online games like Fortnite. The company has repeatedly rebuilt itself to regain and maintain leadership in the industry.

Sweeney described the current market as “the most extreme we’ve seen”, marked by major disruptions but also significant opportunities for companies that can adapt. Epic plans to leverage these conditions to expand its ecosystem and attract more developers.

For affected employees, the company is offering a compensation package that includes at least four months of base salary (increased based on tenure), paid healthcare coverage, and up to six months in the U.S. Additionally, stock option vesting has been accelerated to January 2027, with an extended exercise window of two years.

Epic also plans to hold an all-hands meeting to discuss its roadmap and future plans.

In related news, it has been reported that several game modes in Fortnite may be discontinued: Festival Battle Stage and Ballistic are expected to shut down on April 16, while Rocket Racing is scheduled to close in October. None of these modes received more than one seasonal update.

These layoffs highlight the challenges of today’s gaming industry, where even major hits like Fortnite must adapt to shifting player behavior, increased competition, and the need to invest in new technologies.