Fortnite maker lays off 1,000 employees. Read Epic Games CEO’s full memo

Fortnite’s parent company Epic Games has announced that it is laying off 1,000 employees. Epic’s chief executive Tim Sweeney apologised for the job cuts in a memo to employees Tuesday, noting that the company has been struggling with industry-wide challenges as well as problems that are unique to Epic.Epic Games, the parent company of popular game Fortnite, is laying off 1,000 employees (Unsplash)Sweeney said the layoffs, along with another $500 million in savings through other means, would put Epic in a more stable position.“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,” Epic Games CEO Tim Sweeney wrote in the memo. “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.”Layoffs not because of AIEven as he blamed a downturn in Fortnite engagement for the layoffs, Sweeney emphasised that the cuts have nothing to do with AI.“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,” he said.The layoffs come shortly after the company raised the price of Fortnite’s in-game currency V-Bucks for the first time since the video game’s launch in 2017.The challengesTim Sweeney said that Epic has been facing the same challenges that plague the gaming industry at large — including slower growth, less spending from customers, other avenues of entertainment, and slower sales.However, it has also been facing challenges that are unique to Fortnite, despite the game’s popularity.“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consent Fortnite magic with every season,” he wrote. Sweeney also noted the issues that come with optimising Fortnite for a ull mobile experience for smartphone users.Read the full memoRead the full text of Epic Games’ CEO Tim Sweeney’s memo to employees below: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.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 consent 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 ourselves and all developers.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.What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6. And we’ll be kicking off the next generation of Epic with huge launch plans towards the end of the year.This isn’t our first time being here. Epic survived upheavals in 1990’s with the move from 2D to 3D with Unreal 1; in the 2000’s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite. Each time, we rebuilt our foundations and earned a renewed leadership position.Market conditions today are the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied massive opportunity for the companies that come out as winners on the other side. That’s what we’re aiming to do for our players, and we aim to bring other like-minded developers in the industry along on the journey to build an increasingly open and vibrant future of entertainment together.At Epic, we pride ourselves in only hiring the industry’s best, so it is very painful to part with so many talented people. The folks impacted the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.We’ll have a company meeting Thursday to talk about the roadmap in more detail.-Tim