Fortnite maker Epic Games is laying off about 830 employees, 16 percent of its total workforce, the company announced Thursday. In addition to the layoff, the company also said it is selling its music platform Bandcamp and spinning off its SuperAwesome game services.
The news of the layoff came on the same day Apple petitioned the U.S. Supreme Court to overturn an order requiring changes to its App Store policies, which stemmed from an antitrust case brought by Epic Games.
In a recent memo posted on its website, Epic’s CEO, Tim Sweeney, announced a significant round of layoffs totaling about 830 jobs. Sweeney explained that approximately two-thirds of these job cuts would affect departments “outside of core development,” as the company aims to reduce costs while preserving its major plans.
“As we shared earlier, we are laying off around 16% of Epic employees. We’re divesting Bandcamp and spinning off most of SuperAwesome.”
Epic, known for its popular games like Fortnite, has been trying to cut costs in various areas of its business, including marketing and events. However, Sweeney noted that layoffs became a necessary step to achieve financial stability.
Sweeney said that Epic had been spending more than it earned while investing in the evolution of the company and expanding Fortnite into a metaverse-inspired ecosystem for creators. He also admitted that he had previously been optimistic about navigating this transition without layoffs but acknowledged that such optimism was unrealistic in hindsight.
“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,” Sweeney wrote. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
In addition to the layoffs, Sweeney revealed that Epic would be selling its music platform, Bandcamp, which it acquired last year, to Songtradr, a music licensing platform. Songtradr assured that it would continue to operate Bandcamp as a marketplace and music community, emphasizing an artist-centric revenue-sharing model.
Furthermore, Sweeney announced that Epic’s advertising business for SuperAwesome, a platform offering kid-friendly services, would become an independent company operating under the SuperAwesome brand.
These layoffs at Epic Games are part of a broader trend in the tech industry, where companies have been grappling with slowing growth and higher interest rates since the beginning of the previous year. Epic Games, privately held with a significant minority stake owned by China’s Tencent, was valued at over $30 billion in 2022.
We covered a little over a year ago after the company raised $2 billion from Sony and Lego Group at a $32 billion valuation.
Founded in 1991 by Mark Rein and Tim Sweeney, Epic operates Fortnite, one of the world’s largest games with over 350 million accounts and 2.5 billion friend connections. Epic also develops Unreal Engine, which powers the world’s leading games and is also adopted across industries such as film and television, architecture, automotive, manufacturing, and simulation. Through Unreal Engine, Epic Games Store, and Epic Online Services, Epic provides an end-to-end digital ecosystem for developers and creators to build, distribute, and operate games and other content.
In 2017, Epic launched the free-to-play battle-royal videogame “Fortnite.” Since then it has amassed a huge following among young gamers. Epic currently has more than 160 million users on its PC store, according to its website. In 2021, Epic received a $250 million investment from Sony, and it raised $1.25 billion in funding in 2018 from investors including KKR.