Epic Games is laying off more than 1,000 employees as it looks to cut costs and stabilize its business. The company acknowledges that player engagement in Fortnite has slowed compared to earlier years, which is affecting revenue growth. The gaming giant said its expenses have been higher than its earnings and now plans to reduce spending by hundreds of millions of dollars. Therefore, the latest layoffs are part of a broader effort to adjust its workforce and operations to match current demand.
Internally, Epic has indicated that it has been operating in an unsustainable financial position for some time, with heavy investments in game development, platform expansion, marketing, and staffing not being matched by corresponding revenue growth. The layoffs are expected to be accompanied by reductions in contractor spending, tighter control over operational budgets, and a slowdown in hiring across multiple divisions.
“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,” the company noted.
At the center of Epic’s challenges is Fortnite, which, despite remaining a highly popular and culturally influential game, is no longer delivering the same level of consistent engagement seen during its peak years. The title once dominated the live-service gaming space, attracting tens of millions of concurrent players and generating billions in annual revenue through in-game purchases like skins, battle passes, and virtual currency. However, in recent times, maintaining that level of engagement has become increasingly difficult as player behaviour evolves and competition intensifies.
The company has admitted that not every seasonal update or content expansion has achieved the expected level of success. In a live-service model, where revenue depends on sustained player interest and frequent spending, even moderate declines in engagement can have a noticeable financial impact.
The layoffs also come after earlier cost-control measures, including price increases for Fortnite’s in-game currency, V-Bucks, which were introduced to offset rising operational costs and inflationary pressures. Importantly, the company has clarified that these layoffs are not driven by the adoption of artificial intelligence or automation technologies. Instead, they are the result of traditional business challenges.
This is not the first major workforce reduction for the company. In 2023, Epic laid off about 830 employees, accounting for about 16% of its workforce at the time. With the latest cuts, the total number of jobs eliminated over the past few years reaches around 2,000, pointing to a longer-term restructuring process rather than a short-term response to market conditions.
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