Epic Games is laying off 1,000 employees on Tuesday, according to a company memo that was posted on Epic’s blog.
“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,” Epic Games CEO Tim Sweeney wrote in the memo. “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.”
Last week, Epic also increased the price of V-Bucks, the Fortnite in-game currency, saying that “the cost of running Fortnite has gone up a lot.”
Sweeney said that the layoffs were not caused by AI making developers’ jobs redundant. Indirectly, though, the company may be facing AI-related headwinds, since the RAM shortage and demand for chips have had ripple effects across the industry, and have also impacted consumer spending.
Laid-off employees will get four months of severance pay, with more for people with longer tenures. Epic will continue paying for the healthcare of U.S. employees for six months after the layoff.
