alt Hacker NewsEpic Games to cut more than 1k jobs as Fortnite usage falls
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I am not Tim Sweeney's biggest fan. I know he and his company have many detractors. Please read this comment with that in mind, because while I don't love them, I also think that as layoff announcements go, this is good. No beating around the bush, explicitly NOT blaming AI, taking responsibility, taking care of those impacted. If you are gonna do it, this is as good as it can get.
I think the reality is that Epic got big because of Fortnite but nothing lasts forever. They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way): going silent and making whatever they wanted for a while, and then trying to repeat the cycle, rebuilding the chest, and then going on. Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
Meanwhile, Epic has many stable and valuable businesses - Unreal, the game store, etc. - which are perfectly capable of sustaining a sizable company. Just not one as sizable as Epic is. The best case for them is they figure that out, and manage to make a sustainable go of it doing that.
Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
Epic gave away 662 Million free games in 2025 alone. They pay the game devs for each copy they give away. They've been doing this for 8+ years.
https://insider-gaming.com/epic-games-store-give-away-662-mi...
In addition they've payed other game devs for Epic Game Store exclusivity so games would be available for 1 year before being released on Steam.
The whole company has been mismanaged into the side of a mountain.
Epic's 2019 P&L was published as part of Epic v. Apple. According to that:
* Fortnight revenue was $5.5B in 2018 and $3.8B in 2019
* Employee counts in those years: 1063 and 1932
* Average "People" cost per employee: $141K, $142K (CPI adjusted is $182K in 2026).
* Average "Production & Hosting" cost per employee: $189K, $150K (CPI $248K, $194K)
* Platform royalty expenses were 25% of total game revenue
* Slightly under half their Operating Expenses were people
* Fortnight was >90% of revenue
I have a strong guess that "People" costs doesn't include all salaries, and that many employees are categorized under "Production & Hosting", although I expect that also includes other costs. I'll guess 75% is people, which makes total CPI adjusted average cost per employee somewhere around $320K-$370K, but I'll say $320K.
This means 5000 employees cost around $1.6B and cutting 1000 saved around $320M/year in addition to $500M of other costs.
Most estimates of Fortnight revenue claim it's roughly flat or falling between 2020 and 2025 fluctuating between $3B and $6B.
Unless Unreal Engine or EGS revenue took off, it's kind of weird to quadruple headcount while keeping revenue basically flat or falling. If fortnight only makes $2B next year, then they would be underwater on just royalties and salaries.
https://s3.documentcloud.org/documents/20696836/epic-apple-t...
Epic should learn from Valve. The only guy touching TF2 is a cleaning manager who dusts off serves once in a year.
Not long ago I was looking at my favorite games of decades past. Unreal Tournament figured very prominently, made of course by Epic. So I wondered: why did they stop making Unreal games? I looked at their game chronology. On one hand, they made Gears of War, an Xbox exclusive that never interested me. And the other one? Oh, right: Fortnite. That's where Unreal Tournament went. They made tons of money for sure. But no company, including Epic, has made a competitive FPS + CTF game as solid as UT, UT2003, or UT2004 since that era
I’ve wondered how much money was burned on Tim Sweeneys quixotic quest to re-create the Steam store. I know a lot of people who would religiously download the “free games” but never spent a cent.
>The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.
>For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.
Quite stunned that Fortnites 5bn per year isn't enough to keep them going.
They've been pull about that much in per year since 2019 AFAIK.
I really hope this one have knock ons for Unreal Engine or lead to Unity like licensing. Their indie grants are also quite generous.
Roblox is the elephant in the room here which fills the niche for freemium, fun 3D experiences that run on basically any platform or device.
As far as layoff packages go, this is pretty good. 6 months health insurance and at least 4 months pay. The last 2 layoffs I experienced were just 1 week pay for every year you worked there and zero extended health benefits. And they made sure to note that they didn’t have to pay out anything at all, legally.
The wording of the announcement is better than the usual corporate non-speak too.
Coupled with the recent price increase of V-Bucks, things do not look like they are shaping up well.
https://www.fortnite.com/news/fortnite-v-bucks-price-increas...
1000 layoffs represents around 25% of Epic's total workforce.
The CEO is worth 7B+. 1000 employees at 100k/yr would cost him 100M - less than his net worth fluctuates on any given day and only 20% of other costs savings they have identified.
Executives care little about the stakeholders: the employees, the customers, the community. It's their company, too. They only care about investors and themselves. People who "own" pay a lower tax rate than those that "work". Let's fix that and make things great again.
With the downturn in Fortnite (and with it the dream of Fortnite as a platform), and apparent failure of Meta Horizon (at least on the Quest) . . . does that mean the entire concept of a 3D metaverse type UI is dead for another generation?
They have way too many employees for what they do.
Seems like Epic won the battle against Apple, but lost the war. My kids haven't played Fortnite since it was dropped from the Apple Store.
Wow and I thought the amount of money my son pays for skins alone would be more than enough to keep the entire company afloat
Speaking personally, the move to unreal engine 5 ruined the feel of the game. Somehow it had a very unique and polished gameplay loop that was as addicting as CS and the unreal 5 launch changed it, at least for the hardware I was running
There are three other submissions in the queue and likely more on this.
I know someone in Epic and they told me that its no secret inside Epic that Roblox is killing them. Why? He told me a story where a neighbors kid came by and wanted to play Roblox but he told the kid he didn't have Roblox. The child replied "It's easy! I'll show you!" and this 8 year old sat at his PC, downloaded a few MB client, signs in, selects a game and is playing within minutes. The game was a brain dead platform jumping game where you jump to the top of a tower. No enemies. No items. No anything. Just get to the top. Yay. At one point the kid fell down and the game offered to move him back to where he was for $3. Yup a fucking game hit a kid up for hard cash. The people who makes these games are child predators. Scum really.
Epics problem is Unreal can't be easily deployed like Roblox. You want to play Lego star-wars? You need to first download the base Lego game of 30GB then the 20GB Star Wars pack. A Roblox user just downloads a small client, signs in and is ready to play a stupid simple game that isn't 50+ GB. Unfortunately most of those games are not games but attention stealers that entice users to spend real money on NOTHING.
Shame that everything has been boiled down to an attention and money milking scam.
500M in savings seems like huge amount. Just how unstable is their income? And just what else have they been burning money on to look at that sort of cost saving goal.
> Today we’re laying off over 1000 Epic employees. I'm sorry we're here again. 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.
Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
It's sad that a company being honest about a difficult decision is praiseworthy these days, but here we are.
The Valve comparison is apt. The difference is Valve built Steam as infrastructure first, then quietly stepped back from games. Epic did it backwards — they built the game first, then tried to force the infrastructure (EGS) into existence with money. Much harder to do it that way.
"As the first-person shooter game Fortnite"
What? If the person writing the article is so unfamiliar with the subject they are writing about, they likely should not be writing about it.
Not a single comment mentioning UEFN? Epic's failed attempt at copying Roblox?
Epic has been pissing money away paying "creators" to churn out slop "red versus blue" modes/maps for Epic's meta-verse.
A lot of these maps are effectively hello world applications. Like the lowest of low quality. You add in a few weapon spawns, a few prefab buildings, and you're done. Time to get yourself a few thousand a month.
This one is sad for me as a Fortnite player and someone who lives in the town where Epic Games is headquartered.
500 millions in savings? They seem to have been burning lot of money. And relying on single game seems to not be working.
Also I wonder if their low cut on EGS is doing part of these problems...
Fortnite usage fell? Maybe there's hope for humanity after all.
Fortnite is 9 years old this year. Epic brought in biblical amounts of money from just this one property over this time. Where and how did they spend this money?
> Fortnite "Usage"
I like this choice of word, it seems fitting.
And yet somehow the stats show that most likely 2026 is easily on track to be a bumper gaming year, surpassing 2025.
Revenue wise they might be down from the 6bn in 2025 to somewhere in the mid 5's, so might as well get rid of 1000 employees while handing out bigger bonuses to senior staff.
Another case of reactive management leaving employees to bear the consequences of executive decisions. Forcing 16% job cuts despite years of financial warnings says a lot.
It's a very straight forward letter without all of the usual fluff, which I appreciate. Bit it's concerning how much Epic still seems to be hanging their hat on Fortnite. Trends come and go and it seems unlikely to me that Fortnite will grow significantly in the future. It had its moment, they should be focusing on the next big thing.
For context, they recently increased the prices of the game's cosmetics significantly to, and I quote, "help pay the bills" [1].
Apparently, that wasn't enough, and the billions of dollars in revenue the game makes every year are simply too little to keep the lights on. So now they're laying off over a thousand people and cutting several official gamemodes, so they can continue paying hundreds of millions to the creators of AI slop modes like Steal the Brainrot [2].
It's becoming increasingly clear that Epic Games is a dysfunctional company that simply stumbled onto a golden goose by sheer luck, and now that the goose can't lay eggs any faster to keep the line going up, they're panicking.
[1] https://www.fortnite.com/news/fortnite-v-bucks-price-increas...
[2] https://www.fortnite.com/news/fortnite-developers-will-soon-...
Epic was very lucky with Fortnite. Originally they showed the game at GDC as more of a mining, resource collection and building game. Frankly it looked boring.
Changing that to a shooter with the Battle Royale mechanic was a $10 billion win. They have managed it pretty well, but it seems they just over extended without innovating to attract and retain players.
[dead]
Discussion on source: https://news.ycombinator.com/item?id=47503239
I hate that Tim got lucky two times with initiatives of employees that went against his will. I hope epic falters.
Since when do people refer to game playing as usage?
> "We're spending significantly more than we're making, and we have to make major cuts to keep the company funded," he said.
Sorry, HOW?!?
How can a company like Epic games with one of the most successful gaming products of the last few decades be losing money with a product that is so mature? Almost every other games developer would love to be in their position on Fortnite but they've somehow turned that into a loss making proposition?!? I'm baffled.