Epic Games has announced a sweeping round of layoffs impacting more than 1,000 employees. In an internal message later shared publicly, CEO Tim Sweeney described the decision as difficult but necessary, pointing to a sustained decline in player engagement for Fortnite that began in 2025. Despite the title’s ongoing popularity and high-profile collaborations, the company admitted it has been “spending significantly more than we’re making.” These layoffs are part of a broader restructuring effort that includes over $500 million in cuts across marketing, contractors, and unfilled roles.
Epic emphasized that its struggles are not isolated, but instead reflect broader challenges across the gaming industry. Sweeney cited that player spending has slowed, current console generations have underperformed compared to past cycles, and games now face increasing competition from other forms of digital entertainment. Even Fortnite, one of the most successful games of this generation, has had difficulty maintaining consistent seasonal engagement. In response, Epic has taken steps such as raising the price of in-game currency V-Bucks to stabilize revenue.
The layoffs are also having a ripple effect across Epic’s ecosystem, with several projects and games being shut down or scaled back. Rocket Racing, Ballistic, and Festival Battle Stage are scheduled to go offline in 2026, while Horizon Chase and Horizon Chase Turbo will be removed from digital stores starting June 1. Horizon Chase 2, however, will remain available.
While Epic acknowledged that some of its difficulties stem from ambitious long-term investments–such as expanding Fortnite to mobile platforms and developing games around Unreal Engine 5 and the upcoming Unreal Engine 6–Sweeney stressed that the layoffs are unrelated to artificial intelligence. Instead, he framed them as a necessary step to ensure sustainability while preserving core talent. Epic now joins other major industry players like Microsoft, Sony, and EA in implementing significant job cuts.
Despite this, Sweeney expressed cautious optimism, betting that restructuring now will allow Epic to adapt and remain competitive in a rapidly evolving entertainment landscape.