Epic Games Lays Off Over 1,000 Staff as Fortnite Engagement Drops

Over 1,000 people at Epic Games lost their jobs today. Tim Sweeney, founder and CEO, confirmed the news in a memo sent to staff and then posted publicly on the Epic Games website.

"I'm sorry we're here again," Sweeney wrote. "The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded."

This is not the first time Epic has been here. Back in 2023, the company cut around 830 staff, roughly 16% of its workforce at the time. Today's cuts go further. According to a company spokesperson, Epic now has just over 4,000 employees remaining, meaning today's round amounts to roughly 20% of its headcount.

The layoffs come packaged with over $500 million in identified savings across contracting, marketing, and a freeze on filling certain roles.

The numbers do not lie

Sweeney did not shy away from the specifics. Fortnite, despite remaining one of the most-played games on the planet, has been losing ground. Seasons have not consistently hit the mark, the game is still in the early stages of its return to mobile after years of legal battles with Apple and Google, and the broader games industry is in a rough spot. Current consoles are selling below last generation's pace. Spending is down. Competition for players' time has never been tougher.

"Some of the challenges we're facing are industry-wide challenges," Sweeney wrote, pointing to slower growth and what he called "tougher cost economics." Epic is hardly alone in that. This year has already seen layoffs hit Crystal Dynamics, EA's Battlefield Studios, Ubisoft's Red Storm Entertainment, and Riot Games, among others.

Epic's own Year in Review last month quietly signalled the problem, noting that overall gameplay hours had fallen year-on-year. Third-party content hours went up 4%, which if anything makes the picture clearer. Players are spending more time in creator-made experiences and less in Epic's own flagship modes.

Three modes are going dark

Alongside the layoffs, Epic announced the shutdown of three Fortnite game modes.

• Ballistic (the 5v5 FPS mode) goes offline on 16 April
• Festival Battle Stage (the competitive PvP rhythm mode) goes offline on 16 April
• Rocket Racing shuts down in October 2026

"We've built a lot of Fortnite modes, and in some cases we failed to build something awesome enough to attract and retain a large player base," Epic said in a statement posted to social media. "We're grateful for everyone who played."

Rocket Racing, developed by Psyonix (the Rocket League studio), was one of the headline features when Epic unveiled its multi-game metaverse vision back in 2023. It never found its audience. Ballistic is arguably the one that stings most for the community. It was only added in December 2024, and many players felt it was never given a proper chance to grow. Fortnite Festival itself survives, though its Battle Stage PvP mode is gone. Festival Main Stage and Jam Stage continue on.

The V-Bucks price rise hangs over all of this

The timing is worth noting. Just weeks ago, Epic raised the price of V-Bucks, the in-game currency used to buy cosmetics and the Battle Pass, telling players the move was needed to "help pay the bills." The backlash was substantial. Now, within weeks of that price hike and just a week after the launch of Fortnite's latest season, the company is announcing its biggest round of redundancies in years.

Sweeney was firm on one point: the layoffs have nothing to do with AI. "Since it's a thing now, I should note that the layoffs aren't related to AI," he wrote. "To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can."

Affected employees will receive a severance package covering at least four months of base pay, with additional pay tied to tenure. In the US, Epic-paid healthcare coverage extends for six months. Stock options vesting will be accelerated through January 2027, with an extended exercise window of up to two years.

What comes next

Sweeney framed the restructuring as a reset rather than a retreat. The focus going forward will be on delivering stronger seasonal Fortnite content, developing Unreal Engine 6, expanding UEFN tools, and pushing further into mobile. He also referenced "huge launch plans towards the end of the year" without giving specifics.

"Market conditions today are the most extreme we've seen since those early days," Sweeney wrote, referencing the upheaval Epic navigated in the 90s, the 2000s, and again in 2012. "Each time, we rebuilt our foundations and earned a renewed leadership position."

Whether that confidence is well-placed is something only time will answer. For now, over a thousand people are out of a job, and Fortnite's sprawling ambitions have been trimmed back considerably.