Epic Games Lays Off 1,000 as Fortnite’s Slump Deepens

TLDR

• Epic Games is cutting 1,000 jobs due to a drop in Fortnite player engagement starting in 2025.
• CEO Tim Sweeney says the company is “spending significantly more than we’re making.”
• Epic has identified $500 million in cost savings across contracting and marketing.
• Sweeney confirmed the layoffs are not related to AI adoption.
• This is the second major round of cuts; Epic laid off 830 employees in September 2023.

Epic Games has announced it is laying off more than 1,000 employees. CEO Tim Sweeney broke the news to staff on Tuesday, blaming a “downturn in Fortnite engagement that started in 2025.”

In a letter published on Epic’s website, Sweeney was direct: the company is “spending significantly more than we’re making.” That’s not the kind of line you bury in a footnote.

The cuts are part of a wider effort to stabilize the business. Epic says it has also identified $500 million in cost savings through reduced contracting and marketing spend, along with closing some open roles.

Sweeney pointed to both industry-wide and company-specific challenges. On the broader side, he cited slower growth, weaker consumer spending, and tougher competition for people’s time from other entertainment.

He also flagged console sales declining as a contributing factor. Video games are no longer the only game in town, so to speak.

On the Epic-specific side, Sweeney acknowledged the difficulty of delivering “consistent Fortnite magic with every season” — a challenge that has clearly caught up with the company.

Fortnite only returned to Apple’s US App Store in 2025, nearly five years after Apple removed it over a payment dispute. Getting back on mobile was supposed to be a growth catalyst, but engagement has still trended down.

Epic also hiked the price of Fortnite’s in-game currency V-Bucks ahead of the layoffs, citing increased operating costs. That move was described as helping “pay the bills.”

Not the First Time

This is not new territory for Epic. In September 2023, the company cut 830 roles — about 16% of its workforce — citing similar pressures. Sweeney acknowledged as much in his note to staff: “I’m sorry we’re here again.”

The cuts also land in the middle of a rough stretch for the broader gaming sector. Electronic Arts announced cuts to its Battlefield teams in early March, calling it a move to “better align” resources.

What’s Next

Sweeney used the letter to also flag what comes next. Epic says it will keep developing Unreal Engine 6 and plans a “huge launch later this year” to kick off what he called the next generation of Epic Games.

It’s not entirely clear whether that launch refers to Unreal Engine 6 or a new title altogether.

Epic Games remains a private company and is not publicly traded.

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