Epic Games is laying off one thousand employees. The news came in a company memo posted on the company’s blog.
CEO Tim Sweeney explained the decision in the memo, citing a downturn in Fortnite engagement that began in 2025. He stated the company is spending significantly more than it earns and must make major cuts to remain funded. Sweeney noted that these layoffs, combined with over five hundred million dollars in identified savings from contracting, marketing, and closing open roles, will place the company in a more stable financial position.
This follows a recent price increase for V-Bucks, the in-game currency for Fortnite. The company stated the cost of running Fortnite has risen substantially.
Sweeney clarified that the layoffs were not due to artificial intelligence making developer jobs redundant. However, he indicated the company may be facing indirect AI-related challenges. A shortage of RAM and high demand for chips have created ripple effects across the industry and have also impacted consumer spending patterns.
Affected employees will receive four months of severance pay, with additional compensation for those with longer tenures at the company. Epic Games will also continue to pay for healthcare coverage for its U.S. employees for six months following their departure.