Epic Games, the studio behind Unreal Engine and popular video game “Fortnite,” is laying off roughly 830 employees. That’s 16% of their workforce! Epic CEO, Tim Sweeney, released a memo to employees on September 28th outlining their new business strategy. The company plans on shifting “Fortnite” to being a “creator-driven” platform.
“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.”
Epic Games also plans to divest its Bandcamp audio distribution platform. The platform will be acquired by the music marketplace, Songtradr. The company’s SuperAwesome advertising business will become its own company, the founders reacquired the firm.
“Epic folks around the world have been making ongoing efforts to reduce costs, including moving to net zero hiring and cutting operating spend on things like marketing and events,” Sweeney continued. “But we still ended up far short of financial sustainability. We concluded that layoffs are the only way, and that doing them now and on this scale will stabilize our finances.”
As for “Fortnite,” Sweeney mentions that the game “is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.”