Epic Games, the brains behind the popular game Fortnite, has announced a significant restructuring, resulting in an Epic Games layoff that equals to a 16% reduction of its workforce, affecting approximately 870 employees.
The decision was revealed on Thursday, alongside plans to divest Bandcamp, an online audio distribution platform acquired last year, and to spin off the majority of SuperAwesome, a developer specializing in kid-safe technology, which Epic Games acquired in 2020.
Details of the Epic Games layoff
In a memo to employees, Epic Games CEO Tim Sweeney acknowledged the company’s financial challenges, stating,
For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.
Despite ongoing efforts to curb expenses, such as implementing a net-zero hiring policy and reducing operational costs in areas like marketing and events, the company fell short of achieving financial stability. Consequently, the decision to implement layoffs on this scale was deemed necessary to restore the company’s fiscal footing.
Regarding Bandcamp and SuperAwesome, Bandcamp is set to join forces with Songtradr, a music marketplace company. Meanwhile, SuperAwesome’s advertising arm will operate as an independent entity under the SuperAwesome brand, led by its current CEO, Kate O’Loughlin.
Sweeney emphasized, “We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans.” He further explained that while some products and initiatives may experience delays due to temporary resource constraints, the company remains committed to achieving its goals.
Epic Games remains steadfast in its commitment to deliver its most anticipated projects, including the upcoming Fortnite Season and Fortnite Chapter 5, Del Mar, Sparks, and Juno. The release schedules for these endeavors remain unaffected.
In tandem with this announcement, Epic Games disclosed that the price of Fortnite V-Bucks will see an increase in the United States and several other countries, starting October 27. The company attributed this adjustment, ranging from 12% to 15% per bundle, to economic factors such as inflation and currency fluctuations.
Simultaneously, Epic has submitted a cert petition to the Supreme Court, seeking a reevaluation of a 2021 ruling regarding Apple’s App Store policies. If the Supreme Court opts to hear the case, it would reignite a legal battle between Epic and Apple, which originated in August 2020.
Epic Games affirmed in a newsroom post,
We’ve been taking steps to reduce our legal expenses, but are continuing the fight against Apple and Google distribution monopolies and taxes, so the metaverse can thrive and bring opportunity to Epic and all other developers.
As Epic Games presses forward with its ambitious plans, including the highly anticipated Fortnite Season and Chapter 5, the gaming community eagerly awaits the next evolution of this pioneering metaverse-inspired ecosystem. In the midst of these changes, like the Epic Games layoff, the company’s unwavering dedication to challenging distribution monopolies and taxes underscores its determination to foster a thriving metaverse for all developers.
Featured image credit: Epic Games
