Epic Games to Lay Off 1,000 Employees

Following a fall in engagement and slower industry-wide growth, Fortnite creator Epic Games has announced it is laying off more than 1,000 employees.

Epic Games CEO Tim Sweeney announced the layoffs in a note shared with employees, sharing that the job cuts, alongside US$500m in identified cost savings across contracting, marketing and closing some open roles, would help put the company “in a more stable place.”

According to Tim, the company is “spending significantly more than we’re making,” and needs to make “major cuts” in order to keep the company funded. 

Decreases in engagement

While Epic Games saw some improvements in yearly performance when compared to 2024 – such as a 6% increase in total PC spending – the company’s engagement has dropped significantly. 

Epic Games users expend 6.65bn hours in games across 2025, which was a 14% drop when compared to 2024. 

Average daily active users for Fortnite, Epic’s most popular game, have decreased from 2,385,906 in January 2024 to 873,425 in March 2026.  

Tim says that despite Fortnite “remaining one of the most successful games in the world,” Epic has struggled to deliver “consistent Fortnite magic with every season.”

He continues: “We're only in the early stages of returning to mobile and optimising Fortnite for the world's billions of smartphones; and in being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.”

Epic’s 2023 layoffs

These job cuts follow the company’s 2023 layoffs, in which Epic laid off around 16% of its workforce, or around 830 employees. 

In a company memo, Tim said that he had hoped that the company could “power through” a challenging financial period for the company without layoffs, but “in retrospect I see this was unrealistic.” 

Alongside these layoffs, the company announced divestitures in Bandcamp, which it acquired in 2022, and some of SuperAwesome, which it acquired in 2020. 

At the time, Tim said that “saying goodbye to those who have helped build Epic is a terrible experience for all.”

The gaming industry’s post COVID slump

According to Tim, many of the current challenges Epic is facing are “industry wide,” – including slower growth, weaker spending and tougher cost economics. 

Around 45,000 jobs were lost in the gaming industry between 2022 and 2025, in major companies such as Microsoft Gaming, Electronic Arts, Ubisoft and Sega. 

COVID-19 led to a rapid period of growth for the gaming industry – in 2020 revenue from home console games increased 33.9%, while mobile game revenue climbed by 32.8%, according to the IDC. 

This unexpected surge led to many gaming companies anticipating sustained growth, making investments in employee growth and wide scale acquisitions. 

Epic Games itself increased the number of its games in its catalogue from 190 in 2019 to 471 by the end of 2020 as daily active users increased by 192%. 

This rapid growth became unsustainable for many gaming companies following the lowering of COVID restrictions, leaving many with bloated organisations that were costing too much to run – leading to wide scale cutbacks.