Epic Games announces mass layoffs affecting 16 percent of its employees

Epic Games has just announced plans to lay off 16 percent of its employees. That means 830 of its workforce will be affected. Epic Games confirmed the layoffs in an email posted on its website that was written by its co-founder and CEO Tim Sweeney.

In the email, Sweeney stated:

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.

Later in the email, Sweeney stated that about two-thirds of the layoffs will come from Epic's non-core businesses. In addition, the company is selling off the Bandcamp online music store, which it acquired in March 2022, to another similar service, Songtradr. Also, it is spinning off most of the SuperAwesome online security service for kids, which it bought in 2020, into its own separate company once again. Epic will keep its Kids Web Services parent verification tools.

Epic says it will offer the affected employees six months of base pay, and employees in the US, Canada, and Brazil will also get six months of health insurance.

Sweeney added that even with these mass layoffs, he has high hope for Epic Games:

Epic’s prospects for the future are strong. We have amazing game experiences across multiple platforms. We’ve built the best engine in the world, and will be hosting Unreal Fest next week to bring the community together and spotlight the things they are building with Unreal Engine and UEFN. Creators are making a living building for the Fortnite ecosystem, with time in third-party games now exceeding first-party.

In December 2022, Epic Games reached a $540 million settlement with the US Federal Trade Commission to settle claims that Epic had violated the Children’s Online Privacy Protection Act by allowing children and teenagers to unknowingly make in-game purchases in its hit game Fortnite. Earlier this month, the FTC started taking applications from people affected by this action to get refunds from Epic Games.

Source