Epic Games, owner of the insanely popular “Fortnite,” announced that it will fire 16% of its employees, affecting 870 people.
Epic CEO Tim Sweeney told employees in a memo Thursday that the company was investing too much and making too little: “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing ‘Fortnite’ as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.
While Mr. Sweeney lamented the need for layoffs, he described them as inevitable and that the company had long been operating “far short of financial sustainability.” He went on to say the company already was spending less money on advertising and events and seriously cutting back on hiring. “About two-thirds of the layoffs were in teams outside of the core development,” the memo continued. “Some of our products and initiatives will land on schedule, and some may not ship when planned because they are underresourced for the time being. We’re OK with the schedule tradeoff if it means holding on to our ability to achieve our goals, get to the other side of profitability and become a leading metaverse company.
Epic also announced it will cut back investments in such nongaming companies as Bandcamp and SuperAwesome. Meanwhile, Epic is dealing with a legal battle with Apple over in-game purchases through the App Store. Epic is asking the Supreme Court to reexamine a 2021 ruling that let Apple continue to demand a cut of the revenue Epic makes from the mobile version of “Fortnite.”
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