Epic Games, the developer behind the hugely popular video game Fortnite, is cutting more than 1,000 jobs amid tough market conditions, CEO Tim Sweeney announced Tuesday.
The layoffs affect roughly 20% of the company's workforce as the firm grapples with declining engagement in Fortnite and rising costs.
In a blog post, Sweeney said Fortnite, released in 2017, now faces competition from "other increasingly-engaging forms of entertainment" as consumer spending slows and demand for new consoles weakens, CBS News reported.
The battle-royale game, available on platforms like Nintendo Switch and Sony PlayStation, has struggled to maintain the explosive growth that once made it a cultural phenomenon.
"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," Sweeney wrote.
He emphasized that the layoffs are not related to artificial intelligence, which has been cited by other tech firms in recent cuts.
"To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can," he added.
"To me this looks like they're throwing in the towel. Like they're giving up"@SypherPK comments about the 1,000 employees layed off at Epic Games today.
— Quantum Camper (@QuantumCamper) March 24, 2026
I'm not gonna lie I had to fight back tears when he was talking about this on his stream. Fortnite means so much to me and… pic.twitter.com/nnHvPDc5rs
Epic's 2026 Layoffs Follow 16% Reduction in 2023
Epic plans to offset costs with more than $500 million in savings from contracting, marketing, and eliminating some open roles.
Workers affected by the layoffs will receive at least four months of base pay and six months of US health care benefits, the company said.
Industry experts note the move reflects broader trends. Joost van Dreunen, CEO of Aldora Intelligence and a professor at New York University, described the layoffs as a "significant acknowledgment of the change in the industry," highlighting the shift in gaming growth to markets outside the US "The consumer gravity point is moving eastward," he said.
The global gaming industry continues to grow overall, with revenue increasing roughly 4.5% last year, yet American companies like Epic are feeling the pressure.
According to CBSNews, the workforce has been contracting in recent years following a pandemic-era boom, with an estimated 14,600 jobs cut in 2024 and 5,300 last year, according to industry tallies.
Epic last implemented layoffs in 2023, affecting 16% of its staff. Sweeney called the latest cuts "painful but necessary," as the company works to stabilize finances while continuing to optimize Fortnite for mobile platforms, where users increasingly spend their gaming time.
Join the Conversation