Epic Games is set to lay off 1,000 employees on Tuesday, as detailed in a company memo on Epic’s blog. CEO Tim Sweeney cited a decline in Fortnite engagement beginning in 2025, leading to expenditures that surpass earnings. To stabilize financially, the company will implement layoffs alongside over $500 million in cost savings from contracts, marketing, and closing open positions.
Recently, Epic also raised the price of V-Bucks due to increased operational costs for Fortnite. Sweeney clarified that AI is not the direct cause of the layoffs, though industry-wide impacts from chip demand and RAM shortages may have influenced consumer spending. Affected employees will receive a four-month severance, with longer tenures earning additional compensation, and U.S. staff will continue to have their healthcare covered for six months post-layoff.