‘Fortnite’ maker Epic Games laying off 16% of workforce
“Fortnite” franchise maker Epic Games is laying off 830 staffers, about 16% of its workforce, in an effort to reduce costs, CEO Tim Sweeney shared in a memo on Thursday.
Sweeney noted that most pink slips were handed out to team members “outside of core development,” and let workers who survived the layoff know that there would not be any more firings.
An additional 250 people will leave Epic Games through its divestitures from Bandcamp, a streaming platform for independent artists Epic acquired in 2022, and SuperAwesome, a tech safeguarding company that was brought into the gaming giant’s portfolio in 2020.
Axed workers will receive six months of severance and health insurance, as well as accelerated stock vesting, Sweeney said.
“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,” Sweeney wrote.
“I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.”
It’s unclear how much money Epic Games has been losing in recent years as the North Carolina-based company is privately held, though Sweeney assured that the firings were a move “to make our cost structure more sustainable.”
However, Epic’s blockbuster “Fortnite” game, which launched in 2017, has reportedly made the company upwards of $9 billion.
Though the shoot-em-up video game is free to play, its 400 million-plus users spend in-game money called “V Bucks” to purchase upgrades.
The company was valued at $31.5 billion last April after it raised $2 billion from Sony Group and the family-owned holding company behind the Lego Group.
Sony, an existing investor, and the Kirkbi investment company each invested $1 billion, Epic said at the time, with the fundraising to help advance a metaverse partnership the company had entered into with the Lego Group earlier this month.
Sweeney also said that the company has “been taking steps to reduce our legal expenses.”
Representatives for Epic Games did not immediately respond to The Post’s request for comment.
In December, Epic was slapped with a massive $520 million fine by the FTC for violating the Children’s Online Privacy Protection Act (COPPA) by allegedly deploying “dark patterns” that tricked young users into making unintentional purchases.
Some $245 million of the penalty was to refund customers who fell for these unlawful billing practices, while the remaining $275 million was a financial penalty for breaking the COPPA rule — the largest penalty the FTC has ever issued for a violation of this kind.
Epic is also no doubt racked up hefty legal fees after it sued Apple back in 2020 after the tech giant booted “Fortnite” from its app store after Epic set up its own in-app payment system in a bid to dodge Apple’s costly 30% fees.
A judge decided on a compromise ruling in 2021 that appeared to favor Apple, noting the Big Tech firm has the ability to ban Epic from its App Store, adding that Epic, in fact, breached its contract with the iPhone maker.
Just this week Epic appealed the decision, though the Supreme Court has yet to set a date to hear its argument.
