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Epic Games, maker of Fortnite, to lay off 16% of its workforce


Epic Games, maker of Fortnite, to lay off 16% of its workforce

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Epic Games, the maker of Fortnite, said on Thursday that it will lay off 16% of its staff, around 830 employees, as it attempts to reverse what CEO Tim Sweeney called “unrealistic” spending.

In a letter to employees Thursday, Sweeney said the video game company had been “spending way more money than we earn, investing in the next evolution of Epic.”

“I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic,” Sweeney said in the letter, which the company shared publicly. He added that Epic plans to divest from the online independent music platform Bandcamp, which it bought last year and which will now be acquired by the music marketplace firm Songtradr. Epic will also spin off most of its marketing division SuperAwesome into a standalone company.

Epic’s layoffs are just the latest job cuts to hit the tech industry, which was forced to adjust after the stunning growth many companies saw during the height of the Covid-19 pandemic began to slow. Meta, Microsoft, T-Mobile, Lyft and others have all reduced their workforces earlier this year. More recently, Google parent Alphabet made its second round of layoffs of the year, eliminating several hundred recruiting jobs in September after having cut 12,000 employees in January.

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About two-thirds of Epic’s Thursday layoffs will impact employees outside the company’s “core development” teams, Sweeney said. Some laid off workers announced on LinkedIn that they had been affected, including employees working in user experience for Fortnite, production, employee engagement and recruitment.

Laid off employees will receive a severance offer that includes six months of base pay, accelerated stock vesting and other benefits, according to Sweeney.

“We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans,” Sweeney said. “Some of our products and initiatives will land on schedule, and some may not ship when planned because they are under-resourced for the time being. We’re ok with the schedule tradeoff if it means holding on to our ability to achieve our goals.”

The Epic layoffs also come amid the latest escalation in a protracted legal battle between the video game company and tech giant Apple. Following a yearslong back-and-forth over an antitrust lawsuit brought by Epic over Apple’s App Store payment practices, both companies have asked the US Supreme Court to review a lower court ruling in the case.

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