CEO Tim Sweeney says falling player activity and rising costs forced major layoffs
Epic Games is laying off 1,000 employees as the company faces a drop in Fortnite engagement and rising costs. CEO Tim Sweeney confirmed the cuts in a company memo, saying the company is spending more than it is earning.
Sweeney said the decline in Fortnite engagement began in 2025 and has continued to impact revenue. He added that the layoffs, along with more than $500 million in cost cuts across marketing and operations, are aimed at stabilizing the company.
The move follows a recent increase in V-Bucks pricing, which Epic said was due to higher operating costs for Fortnite. The company also said the layoffs are not directly linked to AI replacing jobs.
Epic said affected employees will receive four months of severance pay, with additional support based on tenure. The company will also cover healthcare for U.S. employees for six months after the layoffs.
(Image credit: Epic games / Fortnite)
