Epic Games Confirmed to be Laying Off Around 16% of Staff - News
by William D'Angelo , posted on 01 October 2023 / 3,961 Views
Epic Games CEO Tim Sweeney has confirmed the company is laying off around 16 percent of its employees, divesting Bandcamp and spinning off most of SuperAwesome.
"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," said Sweeney. "I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic."
He added, "Epic folks around the world have been making ongoing efforts to reduce costs, including moving to net zero hiring and cutting operating spend on things like marketing and events. But we still ended up far short of financial sustainability. We concluded that layoffs are the only way, and that doing them now and on this scale will stabilize our finances.
"We're also making some divestitures. Bandcamp is joining Songtradr, a music marketplace company supporting artists. SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand, led by their current CEO Kate O’Loughlin. Kids Web Services (KWS), the parent verification and consent management toolset, will remain part of Epic."
Epic Games is offering a severance package that includes six months base pay and six months of Epic-paid healthcare in the US, Canada, and Brazil. The company is also offering accelerated stock options that are scheduled through the end of 2024 and giving two extra years from today to exercise the options.
Read an FAQ on the layoffs below:
What does this mean for Epic’s priorities?
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We are still focused on shipping our must succeed initiatives: the next Fortnite Season and Fortnite Chapter 5, Del Mar, Sparks, and Juno. Their schedules remain in place.
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We aren't cutting any core businesses, and are continuing to invest in games with Fortnite first-party development, the Fortnite creator ecosystem and economy, Rocket League and Fall Guys; and services for developers including Unreal Engine for games and enterprise, Epic Games Store, Epic Games Publishing, Epic Online Services, Kids Web Services, MetaHuman, Twin Motion, Quixel Mega Scans, Capturing Reality, ArtStation, Sketchfab and Fab.
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We are divesting from Bandcamp and spinning off most of SuperAwesome.
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We'll have a long company meeting later in October to talk about all of our efforts and priorities.
What was the scope of the layoffs?
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We are laying off around 830 employees, or 16% of jobs. About two-thirds of the layoffs were in teams outside of core development.
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Around 250 people are leaving Epic through our divestitures from Bandcamp and SuperAwesome
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We're cutting costs without sacrificing development or lines of businesses so that means business functions are disproportionately impacted compared to development functions.
Will there be more layoffs?
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No. These changes financially stabilize the business.
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The entire goal of this process was to make our cost structure more sustainable and we believe that we have achieved this.
Will Epic continue hiring?
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Yes. We will continue hiring for critical roles, while maintaining net-zero at our new size.
What about Project Liberty?
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We've been taking steps to reduce our legal expenses, but are continuing the fight against Apple and Google distribution monopolies and taxes, so the metaverse can thrive and bring opportunity to Epic and all other developers.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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That is sad to hear. Hope they find another job and that their best games aren't affected.
Usually, it's hard to pinpoint the reason why mass layoffs happen, but it's hard not to see that 99% of Epic's problems are all down to Tim Sweeney's personal vendettas and borderline obsessions. He doesn't even apologize either.
Considering most of the layoffs are outside of their core activities it is hard to say this have anything to do with Tim personality.
Well, Tim mentions that they've been spending more money than they're bringing in. The 2 biggest costliest investments that Epic has, at least publicly, is the now multiple year legal proceedings against Apple and the Epic Games Store that Tim doesn't estimate to be profitable until 2027. At least that was the timeline he said during the initial Epic v Apple hearings.
Both in particular are Tim's personal crusades.
Certainly EGS is not reasonably classified as a " personal crusade". It's simply a business that they're trying to break into.
The lawsuit.... I don't know enough about it to determine if there is a good business case for continuing it. But, if there is not a good business case for a continuing it, then I imagine Tencent would put their foot down. Tim owns a controlling share, but the other shareholders would definitely sue him if he was burning up money on personal crusades.
His personal twitter will tell you everything you need to know. He’s in an unhealthy obsession. He literally said “We've been taking steps to reduce our legal expenses, but are continuing the fight against Apple and Google distribution monopolies and taxes” Epic is a developer who has now been going against the likes of Apple and Google for several years now and plans to continue that losing fight. He had the same mentality when he started the EGS.
He’s stated publicly that he makes the rules when the topic of how much influence Tencent has. Who knows how tense that relationship is now.
