Epic Games lays off more than 1,000 employees: 'We're spending significantly more than we're making,' CEO Tim Sweeney says

Epic Games has laid off more than 1,000 employees. CEO Tim Sweeney says the company is still "spending significantly more" than it's making as a result of an ongoing slump in Fortnite engagement that began in 2025, which has necessitated "major cuts to keep the company funded."

Sweeney said some of the problems facing Epic are endemic to the game industry, such as "current consoles selling less than last generation's," while others are unique to Epic. "Despite Fortnite remaining one of the most successful games in the world, we've had challenges delivering consistent Fortnite magic with every season," Sweeney wrote about the layoffs.

Sweeney also referenced Epic's years-long legal disputes with Apple and Google, an effort that ultimate resulted in victory for Epic but only after a drawn-out and surely very expensive process: "We're only in the early stages of returning to mobile and optimizing Fortnite for the world's billions of smartphones; and in being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers."

Sweeney also stated the layoffs "aren't related to AI."

The plan going forward is to "build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events," Sweeney continued, and "build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events." He also teased a launch of "the next generation of Epic" nearer the end of the year, and your guess is as good as ours as to what that will entail.

"Market conditions today are the most extreme we've seen" since the early days of Epic, which was founded in 1991 and officially became Epic Megagames the following year, Sweeney wrote. But there's also "massive opportunity for the companies that come out as winners on the other side," he added, which is what Epic is now focused on.

The layoffs come just over two years after Epic laid off more than 800 employees, cuts that occurred in September 2023 for essentially the same reason: "We've been spending way more money than we earn," Sweeney said at the time. He said in October 2024 that Epic was "financially sound" after spending the previous year "rebuilding and really executing solidly on all fronts." It also follows just two weeks after Epic raised the price of Fortnite V-Bucks, saying "the cost of running Fortnite has gone up a lot."

Epic told PC Gamer that following the layoffs it will have just over 4,000 employees remaining.