Photo Credit: Vlad Gorshkov
Epic Games cuts over 1,000 jobs in its second major round of layoffs in three years. It’s part of an effort to offset spending more than it’s making on Fortnite.
Despite being one of the most popular video games on the market since its 2017 debut, Fortnite is spending more money than it’s making in 2026. According to Bloomberg, Fortnite developer Epic Games is laying off more than 1,000 employees amid a broader downturn in engagement with the game over the past year. It’s the company’s second major round of cuts in three years, having eliminated 830 employees for similar reasons in September 2023.
“We’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” wrote Tim Sweeney, Epic Games CEO. “This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles, puts us in a more stable place.”
Fortnite has been struggling to maintain its dominance in a market increasingly saturated with “live service” competitors—in spite of the game’s major tie-ins with musicians and other celebrities every few months. But it’s precisely those big names that are bleeding the company dry; even with a whopping $1.5 billion investment from Walt Disney Co. back in 2024 to incorporate properties like Star Wars and Marvel, it costs a lot of dough to keep a live service platform afloat churning out consistent “magic.”
“Market conditions today are the most extreme we’ve seen since those early days,” Sweeney added.
Like the broader tech industry, the video game industry has shed thousands upon thousands of jobs in the last three years alone. Companies like Epic Games have cited factors like weakening consumer spending, rising competition, and the overall cost of components for crucial infrastructure.
But Epic’s struggles are also unique to the company, something that Sweeney is the first to acknowledge. The company also raised the price of Fortnite’s in-game currency last week to help offset the cost of running the game.
Sweeney’s battle with Apple and Google over their respective app store fees and Fortnite’s lack of presence on those storefronts over the past several years is an enormous elephant in the room, too. Epic says it’s only now “in the early stages of returning to mobile” and optimizing Fortnite for a myriad of devices.
However, Sweeney stressed that the company’s job cuts aren’t related to the rise of artificial intelligence. Epic told affected employees that it would offer at least four months of severance, accelerate stock options, and extend health insurance benefits for six months.