Epic Games Implements Workforce Reduction with 830 Employees Affected

In a recent announcement, Epic Games revealed its decision to lay off approximately 16 percent of its workforce, resulting in around 830 employees losing their jobs. The company’s president, Tim Sweeney, explained that these layoffs are a cost-cutting measure, necessitating the divestiture of Bandcamp and the creation of an independent company for the advertising platform, SuperAwesome, which Epic acquired last year. As a result, 250 employees will be leaving Epic.

Financial Realities: Difficult, But Necessary

Sweeney acknowledged that Epic Games has been investing extensively in the next evolution of its brand and in growing Fortnite as a metaverse-inspired ecosystem for creators. However, the company has been spending more money than it earns, ultimately leading to the need for cost reduction. Despite efforts to scale back on marketing and events, Epic fell short of achieving financial stability. Therefore, layoffs became the only viable solution.

Protecting Core Development

Sweeney clarified that two-thirds of the terminations will come from teams outside of core development. He emphasized that the layoffs will not negatively impact game development or any of the company’s lines of business. Additionally, Sweeney assured readers that this will be the only round of layoffs and that Epic Games will still be hiring for critical roles. The development of popular titles like Fortnite, Fall Guys, and Rocket League will continue as planned.

Severance Packages and Support

The affected employees will receive generous severance packages, including six months of base pay and six months of Epic-paid healthcare for workers based in the U.S., Canada, and Brazil. Furthermore, Epic will offer workers the option to accelerate stock options vesting schedules through the end of 2024 and extend the usability of these options by an additional two years. U.S. employees will also have the opportunity to vest any unearned profit sharing from their 401k plans. Epic Games will also provide career transition services and Visa support to assist affected employees during this challenging period.

Looking Forward: Company Meeting and Continued Development

Epic Games has scheduled a company-wide meeting for next month to discuss its efforts and priorities moving forward. These workforce reductions come shortly after the retirement announcement of Donald Mustard, Chief Creative Officer and head of Fortnite. Nonetheless, the development of new content for Fortnite, Fall Guys, Rocket League, and other titles remains on track.