Giant takes drastic measures: 830 employees let go

Jakob A. Overgaard

Oct.01 - 2023 8:24 AM CET

Business
Giant takes drastic measures: 830 employees let go

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Epic Games, the creator of the immensely popular game 'Fortnite', is compelled to lay off a significant number of employees following a prolonged period of excessive expenditures and insufficient revenues.

This decision comes as a shock to many, as the company is known for producing one of the most lucrative games in the industry.

Approximately 16% of Epic Games’ workforce is facing termination, as reported by various media outlets including Eurogamer. Renowned gaming journalist, Jason Schreier, shared on social media that two-thirds of the affected employees are not involved in the core development of games.

In a letter addressed to the staff, Epic Games CEO Tim Sweeney revealed that the company has been spending significantly more than it has been earning.

Sweeney emphasized that the company has been making consistent efforts to cut costs globally. These measures include a hiring freeze and minimal expenditure on marketing and events. According to him, the extensive layoffs are a necessary step to stabilize the company’s financial situation.

Fortnite, the flagship product of Epic Games, has been a cash cow for the company, bringing in billions in revenue since its launch. However, even a company behind such a successful product is not immune to financial challenges and the need for restructuring.

Despite the company’s prominence and financial success in the past, the gaming industry is highly competitive and dynamic, with companies needing to continuously innovate and adapt to changing market trends and consumer preferences. The layoffs at Epic Games highlight the volatile nature of the industry, where even giants are not exempt from financial pressures and workforce adjustments.

In his communication to the employees, Sweeney expressed his long-standing optimism and belief that the company could weather significant changes without resorting to layoffs. However, he acknowledged that this expectation was unrealistic in retrospect. The CEO assured that the current round of layoffs is aimed at stabilizing the company’s finances, suggesting that this move is crucial for the company’s sustainability in the long run.