Epic Games Inc., the company behind the global success Fortnite, the Epic Games Store and the popular Unreal Engine, is being forced to lay off 16% of its total workforce.
According to a publication by Jason Schreier, this announcement signals job loss for nearly 900 employees.
A memo was shared this morning at the North Carolina-based company informing staff of the sad news. It states that in addition to laying off 16% of its staff, the company is also selling Bandcamp and spinning off most of its marketing agency SuperAwesome. Schreier previously told X that “there were rumors circulating about Epic shutting down Slack before the official announcement.”
See also: Death Stranding: Free on the Epic Games Store
“Lately we are spending more money than we earn,” says the memo sent by CEO Tim Sweeney to staff. “For a while I was optimistic that we could handle this without layoffs, but now I admit that this was not realistic.”.
It seems that Fortnite's inability to continue growth is part of the problem. Sweeney says it's "starting to grow again," but that's a result of revenue sharing with creators.
Despite efforts to reduce expenses, Sweeney says that “we are still far from financial sustainability”. He hopes that these layoffs will contribute to the “financial stabilization” of the company.
The laid‑off employees of Epic will receive compensation of up to six months and health benefits, Schreier said on X.
This news would have been impressive under any circumstances, but it's especially surprising now given the seemingly unimaginable state of uncertainty Epic finds itself in. With over 230 million players, Fortnite dominates, with daily user reaching 34.3 million people in 2022. According to Epic's accounts, Fortnite brings in around $5-6 billion annually.
See also: Fortnite: Players can now apply for part of the FTC settlement
These are already impressive numbers before you even consider Unreal Engine fees and Epic Games Store revenue, which reached $355 million last year.
Meanwhile, Epic is divesting Bandcamp, an initially controversial acquisition. It is being sold to Songtradr. Additionally, SuperAwesome, Epic's marketing arm, is splitting off and becoming an independent company with the same name.
Epic Games Inc. is a private company, with CEO Tim Sweeney holding a majority stake. However, consumer-focused Tencent Holdings Ltd. owns a 40% stake
Source: kotaku.com
