Epic Games Cuts Over 1,000 Jobs as Fortnite Engagement Decline Forces Second Major Layoff Round in Three Years
Epic Games lays off roughly 20 percent of its workforce, citing a Fortnite engagement downturn that began in 2025 and over $500 million in targeted cost savings.
Overview
Epic Games announced on March 24 that it is laying off more than 1,000 employees, roughly 20 percent of its workforce, as declining Fortnite engagement and broader industry headwinds force the Unreal Engine maker into its second round of mass cuts in under three years. CEO Tim Sweeney told staff in an internal memo that the company is “spending significantly more than we’re making” and described current market conditions as “the most extreme” since the company’s founding in 1991, according to PBS News.
What We Know
The layoffs will leave Epic Games with approximately 4,000 employees, down from more than 5,000 before the cuts. The company identified over $500 million in additional cost savings through reductions in contracting, marketing expenditures, and unfilled positions, as reported by Fox Business.
Sweeney attributed the cuts primarily to a sustained decline in Fortnite engagement that began in 2025. “We’ve had challenges delivering consistent Fortnite magic with every season,” he wrote, according to Fox Business. Monthly active users across PlayStation and Xbox have fallen 28 percent since 2023, while average monthly playtime dropped from 29 hours in 2023 to 15.4 hours in 2025, according to data cited by Game Developer.
At the company’s Cary, North Carolina headquarters, at least 211 workers were permanently laid off, including artists, engineers, programmers, and designers, according to PBS News. Affected employees will receive at least four months of base pay as severance, with longer-tenured staff receiving additional compensation, plus extended Epic-paid healthcare coverage, as detailed by Fox Business.
Sweeney explicitly stated that the layoffs “aren’t related to AI,” distinguishing Epic’s cuts from a wave of tech industry downsizing driven by automation, according to Fox Business.
Epic is also shutting down three Fortnite experiences: Ballistic and Festival Battle Stage will be removed on April 16, while Rocket Racing will close in October. These modes originated from Epic’s acquisitions of Psyonix in 2019 and Harmonix in 2021, according to Game Developer.
The company also recently increased V-Bucks pricing, Fortnite’s in-game currency, as part of broader monetization changes accompanying the restructuring, as noted by TechCrunch.
What We Don’t Know
Sweeney’s memo outlined a strategy to “build awesome Fortnite experiences” and “accelerate developer tools” through Unreal Engine, but offered no specific product roadmap or timeline for recovery. It remains unclear how deeply the cuts will affect Unreal Engine development, which powers games across the industry and is a major source of licensing revenue for Epic.
Epic’s annual revenue was estimated at more than $6 billion in 2025, according to Game Developer, but the company has not disclosed detailed financials as a privately held firm. How quickly the $500 million in savings will materialize, and whether further cuts could follow, remains uncertain.
Analysis
The layoffs mark Epic’s second major workforce reduction after cutting 830 jobs, or 16 percent of staff, in September 2023. Sweeney referenced that history in his memo, noting that Epic has navigated industry inflection points before, from the 2D-to-3D transition in the 1990s to the rise of online gaming in the 2010s, according to PBS News.
Piers Harding-Rolls, research director at Ampere Analysis, told Game Developer that the cuts “tell us that all companies, whatever size or success, are in a battle to manage their costs,” and projected continued financial pressures driven by anticipated global inflation tied to geopolitical tensions.
Roblox has emerged as a significant competitive threat to Fortnite, with platform metrics surpassing Fortnite in 2025 for the first time in daily visits and average playtime, according to Game Developer. Costly legal battles with Apple and Google over app store policies have also drained resources, with Sweeney citing early-stage mobile operations as an ongoing challenge, according to PBS News.
The restructuring comes just a week after Red Storm Entertainment, also based in Cary, announced 105 job cuts that eliminated its game development operations entirely, underscoring the depth of the gaming industry’s current contraction.