Epic Games, the interactive entertainment company behind the popular game Fortnite, announced on Thursday that 16% of its staffed will soon be laid off as the tech company grapples with “unrealistic” spending, according to CEO Tim Sweeney.
Sweeney notified employees of the impending layoffs impacting more than 800 employees in a letter last week.
“As we shared earlier, we are laying off around 16% of Epic employees. We’re divesting Bandcamp and spinning off most of SuperAwesome,” Sweeney wrote. “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Sweeney explained Epic has been making efforts to reduce costs, including “moving to net zero hiring and cutting operating spend on things like marketing and events.” However, the cost-cutting moves weren’t enough and the company “still ended up far short of financial sustainability.”
“We concluded that layoffs are the only way, and that doing them now and on this scale will stabilize our finances,” he wrote. “Saying goodbye to people who have helped build Epic is a terrible experience for all. The consolation is that we’re adequately funded to support laid off employees: we’re offering a severance package that includes six months base pay and in the US/Canada/Brazil six months of Epic-paid healthcare.”
“We’re offering to accelerate people’s stock option vesting schedule through the end of 2024 and are giving two additional years from today to exercise the options. In the US we’re also offering to vest any unearned profit sharing from their 401k. And we’ll provide benefits including career transition services and visa support where we can,” Sweeney added.
Sweeney noted employees not impacted by the layoffs will “hear more from senior leaders about the path forward for your team.”