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Epic Games is laying off more than 1,000 employees, with CEO Tim Sweeney pointing to a sharp drop in Fortnite engagement that began in 2025.
In a note to staff released Tuesday, Sweeney acknowledged the company had reached a breaking point financially, writing that Epic is now "spending significantly more than we're making." He said the layoffs, alongside more than $500 million in cost reductions across operations, are aimed at stabilizing the business.
The cuts arrive despite Fortnite maintaining its position as one of the world's most recognizable games. However, Sweeney admitted that sustaining excitement around the title has proven difficult, citing struggles to deliver "consistent Fortnite magic" with each new season.
Epic has also faced broader industry pressures, including slower growth, weaker consumer spending, and intensifying competition from other forms of digital
entertainment. According to Sweeney, games are no longer just competing with each other, but with an expanding universe of content vying for users' time.
Some of Epic's challenges, he noted, are self-inflicted. The company's long-running legal battles with Apple and Google delayed Fortnite's return to mobile platforms, limiting access to a massive global audience for years.
Even so, Sweeney dismissed speculation that artificial intelligence played a role in the layoffs, stating plainly that the cuts are unrelated to AI adoption. Instead, he emphasized a renewed focus on building better player experiences and advancing Epic's development tools.
The move marks the second major round of layoffs for Epic in recent years, following significant job cuts in 2023. Sweeney acknowledged the repetition, telling employees, "I'm sorry we're here again."
Across the gaming industry, similar workforce reductions have been unfolding. Companies like Electronic Arts have also trimmed teams, reflecting a wider reset as studios adapt to shifting market realities.
For Epic, the message is clear: survival now depends on rebuilding momentum in a rapidly changing gaming landscape.
