Epic Games confirmed in an announcement this week that it’s laying off around 16% of its employees in an effort to correct a trend of spending more money than the company earns. The news of the layoffs followed a report from Bloomberg from earlier in the day that cited exactly that percentage while saying that number would equate to around 900 jobs gone. At the same time, Epic Games also announced that it’s making similar changes in regards to two of its acquisitions: Bandcamp and SuperAwesome, the first of which joined Epic Games in 2022 while the latter was acquired in 2020.
In a statement shared with Epic Games employees that was later posted publicly via the Epic Games site, CEO Tim Sweeney addressed the layoffs and shared some insights into the future of Fortnite.
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Tim Sweeney’s Statements to Employees
Sweeney referenced the “metaverse-inspired ecosystem” Fortnite has gradually been moving towards as it evolved from a simple battle royale game to a place where people watch movies, attend concerts, and play as and against countless pop culture icons spanning decades of entertainment. That expansion was not free, however, and Sweeney said that despite him remaining “optimistic that we could power through this transition without layoffs,” he realizes now in retrospect that won’t be the case.
“While Fortnite 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,” Sweeney said. “Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics.”
While specifics on impacted groups weren’t offered, Sweeney said “about two-thirds of the layoffs were in teams outside of core development” and that some “products and initiatives” will ship on time while others won’t due to the reduced staffing. Elsewhere in the statements, it was said that the 16% would equate to around 830 employees. Employees affected by the layoffs will receive six months base pay and healthcare paid for by Epic Games.
Sweeney added that no more layoffs are expected and that “These changes financially stabilize the business.”
Bandcamp and SuperAwesome
Like other big gaming companies, Epic Games has made moves in recent years by amassing talent through acquisitions. SuperAwesome, a specialist in kid-safe services meant to help with Fortnite’s wide demographic, will spin off to be independent. Bandcamp will be owned by Songtradr.
“We’re also making some divestitures. Bandcamp is joining Songtradr, a music marketplace company supporting artists,” Sweeney continued. “SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand, led by their current CEO Kate O’Loughlin. Kids Web Services (KWS), the parent verification and consent management toolset, will remain part of Epic.”
All these changes notably follow the announcement from earlier in the month that confirmed Fortnite boss Donald Mustard would be retiring from Epic Games.
