Epic Games lays off 1,000 employees as the Fortnite 'magic' begins to fade

Today, Epic Games announced a massive layoff at the studio. In a note to the company, CEO Tim Sweeney wrote:

"Today, we’re laying off over 1000 Epic employees. I'm sorry we're here again. The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded. This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles, puts us in a more stable place."

That’s a significant amount of spending, close to what Epic reportedly paid Google recently — around $800 million.

Continuing the statement, “Some of the challenges we’re facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other increasingly-engaging forms of entertainment.”

“And some of our challenges are unique to Epic. Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we’re only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones, and in being the industry’s vanguard, we have taken a lot of bullets in a battle which is only in the early days of paying off for ourself and all developers.”

Years ago, Tim Sweeney mentioned they had potentially lost $1 billion due to Fortnite no longer being on the iOS App Store. A definite hole in the pocket for even one of the world’s largest game developers.

Ballistic, Rocket-Racing, and Festival Battle Stage are also shutting down as part of cost-saving measures. With a lesser number of employees, there will be fewer resources available to cover modes, and moving on from less-popular entities is a call, however sad, that Epic is being forced to make.

These modes will be available through April 16. So if they’re included as some of your favorites, now is the time to give them one last run before they’re sunset later next month.

Epic also mentioned AI was not to blame, even though Tim Sweeney has been on record as saying AI would be coming to all games, “Since it's a thing now, I should note that the layoffs aren't related to AI. To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”

At least employees will have some coverage, as many will be granted severance packages of at least four months, and will be paid healthcare coverage of 6 months for employees affected in the United States. Here’s to hoping for a quick and smooth recovery for those affected by today’s news.

What do you think about the news today? Let us know your thoughts in the comments below. My sincerest condolences to anyone affected.

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