July 21, 2024
Epic Games cutoffs workforce by 16%, citing overestimated metaverse revenues
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Epic Games Announces Workforce Reduction and Spin-Off Plans Amid Financial Realignment

Epic Games, the company responsible for Fortnite, has decided to reduce its workforce by 16%, affecting around 830 employees. This decision comes as a response to the company’s overestimation of metaverse-inspired revenue, leading to excessive spending that exceeded its earnings.

In a memo dated September 29, CEO Tim Sweeney expressed the necessity of these layoffs to stabilize the company’s financial situation. Sweeney acknowledged his earlier optimism about avoiding layoffs during this transitional phase but admitted that this expectation was unrealistic.

Sweeney attributed Epic Games’ recent growth to the Fortnite Creator program, which enables players to create and sell their own in-game content, earning a 40% share. However, this shift has resulted in decreased profit margins. He emphasized that while the success of the creator ecosystem was a significant accomplishment, it brought about substantial structural changes in the company’s economic landscape.

Apart from the workforce reductions mentioned, Epic Games also announced the departure of an additional 250 employees. Furthermore, the company revealed its plans to sell the recently acquired music website Bandcamp and to spin off SuperAwesome, a marketing firm specializing in child safety technology, which had joined Epic in 2020.

It is worth noting that former Epic Games employees will receive six months of pay as part of their severance package, and those residing in the United States, Canada, and Brazil can expect an additional six months of paid healthcare coverage.

In addition to Fortnite, which boasts a user base of approximately 400 million registered players, Epic Games is known for its operation of the Unreal Engine. This game development suite serves as the foundation for popular titles like God of War and PlayerUnknown’s Battlegrounds.

Image by freepik

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