The video game company behind the massive battle royale game Fortnite is also fighting for its life. Epic Games is reportedly laying off 870 employees as well as selling some of its previous acquisitions.
Bloomberg reported on the layoffs, announcing that 16% of staff will be affected after the revenue from the company’s massive game Fortnite—which boasts an estimated 230 million average monthly players—began to dry up. According to the outlet, CEO Tim Sweeney claimed that the company’s growth had been fueled by Fortnite’s Creator Program, in which developers can create their own maps and receive 40% of its revenue in exchange. Sweeney reportedly said that this revenue stream was “a lower margin of business” when compared to other sources of income from the game, such as buying character skins, which allowed the company to grow quickly. Now, the company’s profits can’t support its staff.
“For a while now, we’ve been spending way more money than we earn,” Sweeney said in a company memo describing the layoffs. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see this was unrealistic.”
The buck unfortunately does not stop there. Sweeney revealed that an additional 250 employees would also be leaving the company as Epic Games sells two previous acquisitions. The first is the online music distribution platform Bandcamp and the other is Super Awesome, a self-described “kidtech platform” that Epic Games acquired in 2020. Bloomberg reports that two-thirds of the layoffs occurred in departments outside of core development. If you thought the sale of Bandcamp to Epic was bad news, it’s purchase by the relatively under-the-radar licensing conglomerate Songtradr probably isn’t music to your ears.
The job cuts at Epic Games are the latest in a seemingly non-stop firehose of tech layoffs that have plagued the U.S. job market in the last year. Meta and Amazon were some of the largest tech companies that chose to lay off employees, citing some vague variation of the phrase “unforeseen economic conditions” as the justification. Fellow video game companies like EA and Sega have also made the decision to lay off employees in recent months as well.