Fortnite Cuts Off 870 Jobs, 16% Of Its Workforce

Fortnite quickly became a cultural phenomenon, attracting millions of players worldwide and generating substantial revenue. However, as per the latest update, Epic Games recently announced a significant workforce reduction, affecting approximately 870 employees, which amounts to 16% of its total workforce. This announcement has sent shockwaves throughout the gaming industry and beyond. Many former employees of Fortnite posted their situation about the layoffs on LinkedIn and other social media platforms. Check details on Fortnite reduction in 16% of its workforce. 

The Layoff Announcement

Epic Games CEO Tim Sweeney made the layoff announcement in a memo to the company’s employees. In his message, Sweeney candidly acknowledged the company’s financial challenges, noting that Epic Games had been consistently spending more money than it was earning. This overspending was primarily driven by the company’s ambitious plans for Fortnite and its vision of transforming it into a metaverse-inspired ecosystem for creators.

While Sweeney expressed optimism that Epic Games could navigate this transition without resorting to layoffs, he later conceded that this optimism was unrealistic. Despite the company’s efforts to reduce costs, including implementing a hiring freeze and cutting operating expenditures in areas like marketing and events, it became evident that Epic Games was falling short of achieving financial sustainability.

Stabilizing the Company’s Finances

The decision to lay off nearly 16% of its workforce was not made lightly. According to Sweeney, these layoffs are a critical step in stabilizing the company’s finances and ensuring its long-term viability. Epic Games had to make the difficult choice to cut costs while preserving its core development and essential business functions.

Sweeney reassured employees that the layoffs would not compromise the company’s ability to deliver its most successful initiatives. Among the projects that remain on schedule are the next Fortnite Season and Fortnite Chapter 5, which are highly anticipated by the game’s massive player base.

Strategic Changes Beyond Layoffs

In addition to workforce reduction, Epic Games is making strategic changes to its business portfolio. The company is divesting Bandcamp, an online audio distribution platform that it acquired just last year. Bandcamp is now set to join forces with Songtradr, a music marketplace company.

Furthermore, Epic Games is reorganizing SuperAwesome, a kid-safe technology developer that it acquired in 2020. Specifically, SuperAwesome’s advertising business is being spun out as an independent company under the SuperAwesome brand, and it will continue to operate under the leadership of its current CEO, Kate O’Loughlin.

Epic Games’ Legal Battle and Price Adjustments

This news comes amidst other significant developments for Epic Games. The company recently filed a cert petition with the Supreme Court, seeking a reexamination of a 2021 ruling related to Apple’s App Store policies. If the Supreme Court agrees to hear the case, it could reignite a legal battle between Epic Games and Apple, which began in August 2020.

Additionally, Epic Games announced a price increase for Fortnite V-Bucks in the United States and several other countries. The price hike, around 12% to 15% per bundle, is attributed to economic factors like inflation and currency fluctuations.

The decision by Epic Games to lay off a substantial portion of its workforce is a significant development that underscores the challenges faced by even the most successful gaming companies. As Epic Games seeks to stabilize its finances and adapt to a changing landscape, the gaming community and industry stakeholders will be closely watching how these changes impact the future of Fortnite and the company’s broader aspirations.