Photo Credit: Epic Games
Fortnite developer Epic Games plans to lay off 16 percent of its workforce, impacting around 830 employees, the result of ‘spending way more money’ than the company earns.
According to a new report from Bloomberg, Fortnite developer Epic Games is planning to lay off 16% of its workforce, affecting the livelihood of around 830 people. A statement from the company’s CEO Tim Sweeney explains that the cuts are the result of the company “spending way more money than we earn,” and that his “optimism” for such flagrant spending without expecting layoffs was “unrealistic.”
“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. But we still ended up far short of financial sustainability,” writes Sweeney, who notably does not apologize for disrupting the lives of more than 800 people. “We concluded that layoffs are the only way, and that doing them now and on this scale will stabilize our finances.”
Rumors have circulated that Epic would implement job cuts this year, with reports surfacing that the company was seeking investment and speculating Epic would lay off part of its workforce to cut costs. Sweeney’s statement also revealed Epic intends to sell independent music storefront platform Bandcamp — which Epic only acquired last year — to music licensing and artist services company Songtradr.
Tim Sweeney notes that while “saying goodbye” to employees is a “terrible experience for all,” Epic is “adequately funded” to support laid-off employees in offering them six months base pay and six months of company healthcare for those affected who live in the US, Canada, and Brazil. The company will also quicken stock option vesting for employees until 2024 and give US employees the choice to vest any unearned profit sharing from their 401k.
“We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans,” says Sweeney, who insists the company’s prospects for the future are strong. He mentions Unreal Fest to uplift the spirits of employees who were not affected by the layoffs. The event, which is happening next week, showcases creations made with Unreal Engine and Fortnite’s creator tools.
“Creators are making a living building for the Fortnite ecosystem, with time in third-party games now exceeding first-party,” continues Sweeney. Maybe the 800+ former Epic employees will find a future as Fortnite content creators, given the company’s apparent priorities.