Epic Games to cut more than 1,000 jobs as 'Fortnite' usage falls | Reuters

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REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tabCompaniesAmazon.com IncFollowElectronic Arts IncFollowMarch 24 (Reuters) - Epic Games will cut more than 1,000 jobs following a drop in engagement for "Fortnite", the latest layoffs in the video game ​industry where growth has stalled due to economic uncertainty.The company also expects ‌to save $500 million by reducing contracting and marketing spend and eliminating some open roles, CEO Tim Sweeney said in a note to employees on Tuesday. Sign up here."We're spending significantly more than we're making, and ​we have to make major cuts to keep the company funded," he ​said.Blockbuster titles such as the first-person shooter game "Fortnite" had proven resilient ⁠after the pandemic, holding up as a slowdown eroded demand beyond the biggest ​franchises.But engagement is now declining even for those, particularly live-service games that rely on ​a constant flow of costly new content to retain players."We've had challenges delivering consistent Fortnite magic," Sweeney said, adding "market conditions today are the most extreme" since the early days of the company ​founded in 1991."The layoffs aren't related to AI," Sweeney noted amid industry fears that ​the technology could replace developers.Epic had earlier this month raised prices of Fortnite's in-game currency, citing ‌higher ⁠costs to run the game.The move marks Epic's second major round of layoffs in three years. In September 2023, the company cut about 830 jobs, or roughly 16% of its workforce, to boost profitability.It was not immediately clear what percentage of staff ​would be impacted ​by Tuesday's announcement.Last ⁠month, Fortnite topped U.S. monthly active players across PlayStation and Xbox, yet the average playtime fell sharply, according to Mat Piscatella, ​senior director at Circana.Other gaming companies have also cut jobs.In September, ​Electronic Arts (EA.O), opens new tab ⁠laid off hundreds of workers and canceled a Titanfall game that was in development, according to media reports. Amazon's (AMZN.O), opens new tab broader job cuts late last year also affected its ⁠gaming division.Rising ​memory chip prices have added to the industry's ​difficulties, as surging demand from artificial intelligence data centers absorbs supply, pushing up semiconductor costs and forcing console makers to ​raise prices.Reporting by Aditya Soni and Kritika Lamba in Bengaluru; Editing by Tasim ZahidOur Standards: The Thomson Reuters Trust Principles., opens new tabSuggested Topics:LitigationEmployee Benefits & Executive CompensationShareXFacebookLinkedinEmailLinkPurchase Licensing RightsRead Next / Editor's Picks agoLegal IndustrycategoryUS music publishers suing Anthropic make their case against AI 'fair use' agoGovernmentcategoryBaltimore sues Elon Musk's xAI over Grok sexual 'deepfakes' agoGovernmentcategoryJudge orders Trump administration to temporarily unfreeze Chicago transit funding agoGovernmentcategoryVail and Alterra ski resorts face consumer class action over lift ticket pricesMarch 23, 2026WorldcategoryJury in social media addiction trial tells judge it's having difficulty coming to consensusMarch 23, 2026GovernmentcategoryGoogle fends off news publishers' antitrust lawsuit over online search March 23, 2026WorldcategoryUS judge blocks Trump administration from detaining thousands of refugeesMarch 23, 2026GovernmentcategoryFired immigration judges appeal labor board ruling backing their removalMarch 20, 2026SustainabilitycategoryMusk found liable to Twitter shareholders in fraud lawsuit over $44 billion takeover agoSustainabilitycategoryMike Lynch's estate refused permission to appeal in UK HP-Autonomy case agoGovernmentcategoryUS judge will not toss Charlie Javice conviction for defrauding JPMorgan based on clerks' alleged conflicts agoLitigationcategoryCaterpillar countersues Bobcat for infringing machinery patents agoLegal IndustrycategoryFacing DEI pressures, some law firms shield data in latest diversity survey agoGovernmentcategoryUS settles social media censorship case, bars agencies from threatening penalties agoBusinesscategoryGrifols approves IPO of its US biopharma business agoImmunityBio shares fall on FDA warning letter over cancer therapy claims in adSite IndexLatestHomeAuthorsTopic SitemapArchiveArticle SitemapMediaVideosPicturesGraphicsPodcastsLatestHomeAuthorsTopic SitemapArchiveArticle SitemapBrowseWorldBusinessMarketsSustainabilityLegalBreakingviewsTechnologyInvestigationsSportsScienceLifestyleMediaVideosPicturesGraphicsPodcastsAbout ReutersAbout Reuters, opens new tabMedia Center, opens new tabAdvertise with Us, opens new tabCareers, opens new tabReuters News Agency, opens new tabBrand Attribution Guidelines, opens new tabReuters and AI, opens new tabReuters Leadership, opens new tabReuters Fact CheckReuters Diversity Report, opens new tabCommercial Disclosure (Japan), opens new tabStay InformedDownload the App (iOS), opens new tabDownload the App (Android), opens new tabNewslettersSubscribeInformation you can trustReuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. 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Epic Games is undertaking a significant restructuring, announcing plans to eliminate over 1,000 jobs following a decline in user engagement for “Fortnite.” CEO Tim Sweeney attributed the decision to unsustainable spending, stating that the company was “spending significantly more than we’re making,” and necessitating major cuts to maintain financial stability. The restructuring includes a projected $500 million in savings through reduced contracting and marketing expenditures alongside the elimination of several open positions. This move reflects broader challenges within the video game industry, characterized by slowing growth and the reliance on live-service games to generate ongoing revenue.

“Fortnite,” a prominent title following the pandemic, had demonstrated resilience, but decreasing player engagement, particularly in live-service games needing continual content updates, represents a critical issue. According to senior director at Circana, Mat Piscatella, average playtime for “Fortnite” has sharply decreased even amongst its leading positions on PlayStation and Xbox. The layoffs are not linked to the growing concerns surrounding artificial intelligence’s potential impact on game development. Epic Games previously raised prices for in-game currency to address rising operational costs.

This is the second major round of layoffs for Epic Games in just three years, having reduced its workforce by approximately 830 employees—16% of its total staff—in September 2023. Simultaneously, other gaming companies, including Electronic Arts (EA), have implemented job cuts and canceled projects, such as the “Titanfall” game, amidst economic uncertainty. Contributing factors to the industry’s difficulties include escalating memory chip prices, driven by increased demand from artificial intelligence data centers, and subsequent price increases imposed by console manufacturers.

The situation is compounded by broader economic headwinds affecting the technology sector. Notably, the company’s previous price adjustments for “Fortnite’s” in-game currency indicated a strategic response to ongoing financial pressures. The scale of this latest reduction—over 1,000 positions—highlights the magnitude of the challenges facing Epic Games and reinforces broader trends within the gaming industry.