Epic Games confirmed it is cutting more than 1,000 jobs in a single day. Bloomberg first reported the mass layoff before the company published an official statement from CEO Tim Sweeney.
The cuts represent roughly 20%–25% of Epic’s workforce based on industry estimates that put the company’s headcount around 4,000–5,000 employees. This marks one of the largest single-day layoffs in the gaming industry this year.
Epic directly blames the cuts on Fortnite‘s performance. The company says engagement with its flagship game has been dropping since early 2025. “The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making,” Sweeney wrote in the statement.
The CEO made a point of saying the layoffs aren’t related to AI. Epic still wants “as many awesome developers” as possible. The company instead points to slower market growth and weaker consumer spending as contributing factors.
Epic outlined what it plans to focus on going forward. The priorities include building fresh Fortnite seasonal content with new gameplay and live events. The company also wants to speed up its developer tools and transition from Unreal Engine 5 and UEFN to Unreal Engine 6. Sweeney mentioned “huge launch plans” coming later this year but provided no details.
Affected employees in the United States will receive at least four months of severance pay and six months of healthcare coverage. They will also get accelerated stock options. International employees may receive different packages based on local laws and regulations.
This is not Epic’s first round of major cuts. The gaming industry has seen wave after wave of layoffs since 2022. Companies across the board cite overhiring during the pandemic and slower post-pandemic growth as reasons for the reductions.
Fortnite launched in 2017 and became one of the most successful live-service games ever made. The free-to-play model generates billions through cosmetic sales and battle passes. A sustained engagement drop threatens that revenue stream directly.
Epic runs three major businesses. Fortnite remains the cash engine. Unreal Engine licenses to developers across the entire gaming industry. The Epic Games Store competes with Steam on PC but has struggled to gain market share despite offering free weekly games and exclusive releases.
Some observers noted Epic’s statement focuses heavily on Fortnite and Unreal Engine but barely mentions the Epic Games Store. Whether the company plans to scale back its storefront ambitions remains unclear. The store has burned through significant resources since launching in 2018 with an aggressive strategy of exclusives and giveaways.
