Epic Games to lay off over 1,000 employees due to declining Fortnite usage
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Epic Games is cutting more than 1,000 jobs after declining engagement FortniteThe latest layoff in the video game industry, where growth has stalled due to economic uncertainty.
CEO Tim Sweeney said the company also expected to save US$500 million by reducing contracting and marketing expenses and eliminating some open roles. in a note employees on Tuesday.
“We are spending far more than we earn and we have to make big cuts to keep the company funded,” he said.
like blockbuster titles FortniteA third person shooter game, It had proven resilient after the COVID-19 pandemic caused demand to wane beyond the biggest franchises due to the recession.
But engagement is now falling even for those, especially live-service games that rely on a constant flow of expensive new content to retain players.
“We’ve faced challenges in consistently delivering the Fortnite magic,” Sweeney said, adding that “market conditions today are the most extreme” since the early days of the company’s founding in 1991.
“The layoffs are not AI related,” Sweeney said, amid industry fears that the technology could replace developers.
Epic raised the prices of Fortnite’s in-game currency earlier this month, citing higher costs to run the game. CBC News has contacted the company for statement.
Second big round of layoffs in 3 years
The move marks the second major round of layoffs by Epic in three years. In September 2023, the company cut about 830 jobs, about 16 percent of its workforce, to boost profitability.
It was not immediately clear what percentage of employees would be affected by Tuesday’s announcement.
last month, Fortnite According to Matt Piscatella, senior director of Circana, PlayStation and Xbox remain at the top in US monthly active players, yet average playtime has declined sharply.
Other gaming companies have also cut jobs.
In September, Electronic Arts laid off hundreds of employees and canceled Titan fall According to media reports, the game was in development. Amazon’s widespread job cuts late last year also affected its gaming division.
Rising memory chip prices have compounded the industry’s difficulties, as surging demand for AI data centers has absorbed supply, driving up semiconductor costs and forcing console makers to raise prices.
