It has recently come to light that Epic Games, the publisher of Fortnite, will be laying off 16% of its workforce. This indicates that the video game company will soon lay off around 870 employees.
A wave of layoffs at Epic Games
According to Jason Schreier of Bloomberg, Epic Games Inc. executives have informed the company’s staff that more than 870 employees will be removed from their jobs.
Apparently, this wave of layoffs came shortly after Epic Games increased the cost of Fortine currency. These increases in the cost of Fortnite currency have occurred in territories where the U.S. dollar is used as the game’s store currency.
On the other hand, it is important to note that this wave of massive layoffs was already coming, as Epic had initiated a hiring freeze earlier this year. Since then, Epic Games wanted to focus on developing new games.
16% of employees will be affected by Epic Games’ mass layoffs
As mentioned, an email informed Epic Games employees of the massive layoffs. According to the information sent by the company’s CEO, Tim Sweeney, more than 16% will be affected by these layoffs. But that’s not all. It has also been reported that the marketing firm SuperAwesome has returned to its previous status as an independent company. In addition, the independent music publishing platform Bandcamp will be sold to Songtradr.
According to information published by Tim Sweeney, one of the reasons for the layoffs is that Fortnite is having very slow growth. As a result, it is currently costing more to run it than to generate revenue. On the other hand, Sweeney has explained that workers affected by the wave of layoffs will receive severance packages. In these packages, workers will receive a six-month basic salary and medical coverage in Brazil, Canada, and the United States.
This morning, rumors were flying as Epic disabled Slack for employees ahead of the news. Laid-off Epic employees will receive six months severance and health benefits. All-hands meeting happening shortly. Story being updated as I learn more: https://t.co/BK1oVRgCba
— Jason Schreier (@jasonschreier) September 28, 2023
For reference, Epic Games made $6.27 million in revenue and has seen profit margins every year since the launch of Fortnite’s Battle Royale mode.
Unreal Engine 5 development
The last few years have been busy for Epic Games. Recall that they had recently unveiled their brand new Unreal Engine 5, a revolutionary technology that makes developing AAA video games easier. For his part, Sweeney mentioned in the email that he would be presenting the potential of the development engine next week at Unreal Fest. Sweeney highlighted that the new development engine allows some developers to profit from their creations and make a living with them.
On the other hand, in the post, Sweeney also commented to employees that Fortnite is experiencing a decline due to its rapid expansion. Furthermore, he mentioned that the future of the Unreal Engine engine remains uncertain. Now, if we look closely, it could be that Fortnite is so expensive to produce because of the game’s high soundtrack licensing fees. In addition, the game uses the image of many famous characters and gradually reduces the number of players.