Mar 25, 2026 - Epic Games announced it is laying off more than 1,000 employees, citing a downturn in player engagement for its flagship game Fortnite that began in 2025.
The cuts, announced by CEO Tim Sweeney in a memo to staff on Tuesday, represent roughly 20 percent of the company's workforce. Epic Games, the developer of Fortnite and the Unreal Engine, is based in Cary, North Carolina, and employs more than 4,000 people worldwide. Following the layoffs, the company expects to retain more than 4,000 staff.
Sweeney stated in the memo that the company is spending significantly more than it is earning due to the decline in Fortnite engagement. The layoffs, combined with more than $500 million in identified cost savings from contracting, marketing and unfilled positions, are intended to stabilize the company's finances. The memo acknowledged the difficulty of the decision, noting it was the second major round of cuts in recent years.
The video game industry has faced widespread layoffs since 2022, with an estimated 45,000 jobs lost across the sector through mid-2025. Epic's previous layoffs in 2023 affected around 830 employees, or 16 percent of its workforce at the time.
Fortnite, which generates the majority of Epic's revenue through in-game purchases and events, saw peak popularity in earlier years but has experienced reduced daily active users and playtime in recent months, according to industry reports. The company did not provide specific figures on the revenue impact.
Affected employees will receive severance packages, continued health benefits and assistance with job placement, according to the announcement. The cuts are expected to impact various departments, though the company did not detail which teams were most affected.
Epic Games continues to operate its core businesses, including the Epic Games Store and Unreal Engine licensing. The company has faced ongoing legal challenges related to app store policies and antitrust matters in recent years.
As of Wednesday, the layoffs were in process, with no additional rounds announced. Epic Games did not release further details on the timing of departures or specific departments involved. The company said the measures put it in a more stable financial position moving forward.