Epic Games, the creator of Fortnite, has announced a significant workforce reduction, affecting approximately 870 employees, which represents 16% of its workforce. Additionally, the company disclosed its plans to divest Bandcamp, an online audio distribution platform it acquired in the previous year, and spin off a substantial portion of SuperAwesome, a developer specializing in kid-safe technology that Epic acquired in 2020. The news of these layoffs was initially reported by Bloomberg.
Epic Games’ CEO, Tim Sweeney, communicated these decisions in a memo to the company’s employees. In his message, Sweeney acknowledged that Epic had been investing extensively in the evolution of its business and the expansion of Fortnite into a metaverse-inspired ecosystem for creators. However, this approach had led to excessive spending, resulting in financial challenges.
Sweeney wrote, “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.”
He further explained that Epic Games had been actively working to cut costs, including ceasing net hiring and reducing operational expenses in areas such as marketing and events. Despite these efforts, the company found itself falling significantly short of achieving financial sustainability, leading to the difficult decision to implement layoffs. Sweeney emphasized that this strategic move was necessary to stabilize the company’s financial situation.
Regarding the fate of Bandcamp and SuperAwesome, Bandcamp is set to merge with Songtradr, a music marketplace company. Meanwhile, SuperAwesome’s advertising division will emerge as an independent entity under the SuperAwesome brand, with Kate O’Loughlin continuing to serve as its CEO.
Sweeney reassured employees that these measures were aimed at reducing costs without compromising the development of core products and services. While some projects may experience delays due to resource constraints, the company’s priority remains its ambitious plans and the journey toward profitability, aiming to establish itself as a leading metaverse company.
Epic Games remains committed to its existing project schedules, including the upcoming Fortnite Season and Fortnite Chapter 5, with no changes to their release dates.
In related news, Epic Games has announced an impending increase in the price of Fortnite V-Bucks in the United States and several other countries, slated for October 27. The price adjustment, ranging from approximately 12% to 15% per bundle, is attributed to economic factors like inflation and currency fluctuations.
Simultaneously, Epic has taken legal action by filing a cert petition with the Supreme Court, seeking a review of a 2021 ruling concerning Apple’s App Store policies. If the Supreme Court chooses to hear the case, it would reignite the legal dispute between Epic and Apple, which began in August 2020.
In a company statement, Epic emphasized its commitment to challenging distribution monopolies and taxes imposed by Apple and Google, with a view to nurturing a thriving metaverse that benefits Epic and all other developers.
