Epic Games, the developer of the popular video game “Fortnite,” is laying off more than 1,000 employees and cutting $500 million in costs.
Chief Executive Tim Sweeney announced the cuts Tuesday morning in a message to employees. He said it has nothing to do with AI and instead pointed to what he said was a lack of “Fortnite” engagement last year.
“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season,” said Sweeney in a statement.
The company’s flagship game was first released in 2017. Since then, it’s been a key part of internet culture — where character-specific dances became widespread trends and major musicians, like Travis Scott and Ariana Grande, have hosted concerts in the virtual realm.
But Epic has been slow to optimize the computer game for mobile play. A “Fortnite” app was first introduced in 2018, but soon removed due to a legal battle against Apple and Google over app store practices. Sweeney said the company is still in the “early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones.”
Many of Epic’s woes also come from industry-wide challenges, like “slower growth, weaker spending, and tougher cost economics,” Sweeney wrote. And Epic isn’t the only one suffering. In recent years, gaming companies like Electronic Arts and Microsoft’s Xbox division have all cut down their workforces.
Earlier this year, the State of the Game Industry Report from the Game Developers Conference found roughly one-third of U.S. video game industry workers were laid off in the past two years.
Epic Games was founded in 1991 and is headquartered in Cary, North Carolina. It has dozens of offices around the world, including in Los Angeles. Beyond “Fortnite,” the company is known as a leader in 3D engine technology and interactive entertainment.
Over the years, Epic Games has steadily built itself into a major Hollywood player. Its 3D creation tool, the Unreal Engine, has been used to produce visual effects and virtual worlds for shows like Walt Disney Co. and Lucasfilm’s “The Mandalorian” and HBO’s “Westworld.”
In 2024, Disney inked a deal with Epic Games to create a games and entertainment universe with the company’s brands, including Star Wars, Marvel and Pixar. Disney invested $1.5 billion in Epic Games for a minority stake in the company. Newly minted Disney Chief Executive Josh D’Amaro managed the collaboration with Epic Games in his previous role as parks chief to create a Disney world within the popular “Fortnite” game.
Looking ahead, Sweeney plans to focus the company on building “awesome Fortnite experiences” with fresh content and continue to accelerate its developer tools like the Unreal Engine.