Epic Games Lays Off Over 1,000 Employees Due to 'Downturn in Fortnite Engagement'
Epic Games has laid off over 1,000 employees as it restructures amid declining Fortnite engagement and rising costs.
Epic Games has announced a new round of layoffs affecting more than 1,000 employees, marking one of the largest workforce reductions in recent history. The move comes as the studio behind Fortnite and Unreal Engine looks to reduce costs and stabilize its financial position after a period of declining Fortnite engagement and a recently settled legal battle.
This latest restructuring follows a previous round of layoffs in 2023 that impacted roughly 830 employees, signaling an ongoing effort to recalibrate the company’s long-term financial strategy.
"The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded. 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.
Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we're only in the early stages of returning to mobile and optimizing 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 Games CEO, Tim Sweeney
Epic is also making changes within the Fortnite ecosystem, including winding down certain modes such as Rocket Racing, Ballistic, and Festival Battle Stage.
Notably, Epic clarified that the layoffs are not tied to AI adoption. Instead, they reflect wider economic and market pressures affecting the live-service gaming sector, including rising development costs and shifting player behavior.
Across the industry, studios have faced increasing difficulty sustaining long-term engagement and monetization, particularly in free-to-play ecosystems. Recent years have seen widespread layoffs across both AAA and indie developers, underscoring the volatility of the current market.
Historically, Epic has concentrated layoffs outside of core development teams, particularly in areas like publishing, marketing, and support functions. While the company has not detailed the exact distribution of this latest round, its continued investment in Unreal Engine and platform infrastructure suggests that core tooling and engine development will remain a priority.
Notably, Sweeney also specifically mentions the evolution of Unreal Engine 5 and UEFN leading to Unreal Engine 6 as the "next generation of Epic" as well.
"What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6. And we'll be kicking off the next generation of Epic with huge launch plans towards the end of the year."
- Epic Games CEO, Tim Sweeney
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