Epic Games, the developer and publisher behind the massively popular video game Fortnite, is cutting 1,000 jobs as the company grapples with declining player engagement and financial pressures. Epic Games CEO Tim Sweeney says the layoffs are “unrelated to AI.”
IGN reports that video game publisher Epic Games announced the workforce reduction of 1,000 employees in an internal memo from CEO Tim Sweeney, who cited a downturn in engagement with Fortnite that began in 2025. The layoffs will be accompanied by over $500 million in cost savings through reductions in contracting and marketing expenses, as well as closing some open positions.
“We’re spending more than we’re making, and we have to make major cuts to keep the company funded,” Sweeney wrote in the memo to employees. He emphasized that the decision was “unrelated to AI” and explained that improved productivity from artificial intelligence would ideally allow the company to retain more developers working on content and technology.
The job cuts represent a significant setback for Epic Games, which became one of the most envied companies in the media landscape following Fortnite‘s launch in 2017. The game revolutionized the industry with its free-to-play model, generating revenue through in-game purchases of cosmetic items like “skins” rather than charging an upfront premium price as traditional games do.
At its peak, Fortnite attracted more than 125 million players and became a cultural phenomenon. The game’s massive reach transformed it into a platform for artists, movie studios, and other entertainment entities to promote their creative work. Disney formalized its relationship with Epic in 2024, investing $1.5 billion for an equity stake in the privately held company and establishing a partnership centered on Fortnite that would feature Disney’s intellectual property.
In his memo, Sweeney acknowledged both industry-wide challenges and issues specific to Epic Games. He pointed to “slower growth, weaker spending, and tougher cost economics” affecting the entire gaming sector, along with current generation consoles selling less than their predecessors. Games are also facing increased competition from other forms of entertainment vying for consumers’ time and attention.
For Epic specifically, Sweeney admitted the company has struggled with “delivering consistent Fortnite magic with every season.” He noted that Epic is “only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones.” The CEO also referenced the company’s role as an “industry vanguard” that has “taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.”
The CEO drew on historical context to frame the current challenges, noting that Epic has weathered significant industry shifts before. “Epic survived upheavals in 1990’s with the move from 2D to 3D with Unreal 1; in the 2000’s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite,” Sweeney wrote. “Each time, we rebuilt our foundations and earned a renewed leadership position.”
Sweeney characterized current market conditions as “the most extreme we’ve seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side.”
“At Epic, we pride ourselves in only hiring the industry’s best, so it is very painful to part with so many talented people,” Sweeney stated in the memo.
Read more at IGN here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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