Epic Games layoffs 1000 employees amid Fortnite engagement decline and changing gaming market

Epic Games cuts 1000 jobs as Fortnite engagement declines and industry faces slower growth and rising costs

Epic Games has announced plans to lay off more than 1,000 employees, citing a continued decline in Fortnite engagement and wider challenges across the gaming industry.

The decision was confirmed in a memo from chief executive Tim Sweeney, who said the company must reduce costs to remain financially stable.

“Today we're laying off over 1000 Epic employees,” Sweeney wrote. “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.”

The company also outlined additional cost-saving measures, including over $500 million in reduced spending on contractors, marketing and unfilled roles. According to Sweeney, these steps are expected to place Epic Games in “a more stable place”.

Sweeney acknowledged difficulties in maintaining player engagement in Fortnite, stating, “We've had challenges delivering consistent Fortnite magic with every season.”

Despite the game remaining one of the most widely played titles globally, the company indicated that sustaining long-term interest has become increasingly complex.

The memo also referenced broader industry pressures, including slower growth, reduced consumer spending and increased competition for player attention.

Sweeney described current conditions as “the most extreme” the company has faced since its founding in 1991 and clarified that the layoffs are not related to artificial intelligence.

Epic Games confirmed that affected employees will receive at least four months of base pay along with extended healthcare coverage funded by the company.