Epic Games is making a massive workforce reduction, cutting over 1,000 employees in a move to stabilize its finances. CEO Tim Sweeney announced the layoffs Tuesday, revealing that the Fortnite creator is slashing approximately 20% of its staff to address a significant gap between spending and revenue. Alongside the job cuts, the company has identified more than $500 million in cost savings by reducing marketing expenses, contracting, and closing open roles.

Sweeney attributed the decision to a downturn in Fortnite player engagement that began in 2025. In an internal memo, he noted that while the game remains a global powerhouse, the company is "spending significantly more than we’re making." He also pointed to broader industry struggles, including slower consumer spending and current game consoles trailing the sales of previous generations. Despite the timing, Sweeney explicitly clarified that the layoffs are not related to the use of artificial intelligence.

Tim Sweeney
Tim Sweeney — Photo: Official GDC / CC BY 2.0 via Wikimedia Commons

The restructuring will lead to the shutdown of specific Fortnite modes, including Rocket Racing, Ballistic, and the Festival Battle Stage. Moving forward, Epic Games plans to focus on seasonal content and the evolution of its tech with Unreal Engine 6. Affected employees will receive a severance package featuring at least four months of base pay and six months of healthcare coverage for those based in the United States.