Epic Games is set to reduce over 1,000 positions due to a decline in player engagement on Fortnite, as part of ongoing layoffs within the gaming sector impacted by economic uncertainties. CEO Tim Sweeney announced plans to cut costs by $500 million by scaling back contracting, marketing expenses, and eliminating certain job openings.
The company, known for its popular title Fortnite, faced challenges amidst the pandemic but managed to maintain stability; however, even prominent games are now experiencing dwindling engagement levels, particularly those reliant on continuous content updates. Sweeney acknowledged the struggle to sustain Fortnite’s appeal and described current market conditions as the most challenging since the company’s inception in 1991.
Sweeney clarified that the job cuts are not connected to artificial intelligence concerns, reassuring employees amid industry speculations. Earlier this month, Epic Games raised prices for Fortnite’s in-game currency, citing increased operational costs. The company has yet to provide further comments on the situation.
This recent round of layoffs marks Epic’s second significant downsizing in three years, following a workforce reduction of about 830 employees in 2023 aimed at enhancing profitability. Details on the exact percentage of affected staff from this latest announcement remain undisclosed.
Despite Fortnite’s continued popularity, recent data showed a decline in average playtime, reflecting shifting player behaviors. Other gaming companies have also resorted to layoffs, with Electronic Arts and Amazon making substantial job cuts in response to industry challenges, including rising memory chip prices driven by heightened demand from AI data centers, leading to increased semiconductor costs and subsequent price adjustments by console manufacturers.