Epic Games Lays Off Over 1,000 Employees Due to 'Downturn in Fortnite' - News
by William D'Angelo , posted on 24 March 2026 / 3,019 Views
Epic Games CEO Tim Sweeney in an email sent to employees announced it is laying off over 1,000 employees due to a "downturn in Fortnite engagement."
Sweeney stated the company is spending "significantly more" than it is making and the layoffs have to be done in order to keep making money. These layoffs and over $500 million in other cuts will put Epic Games in a "more stable place." He did add the layoffs are not related to AI.
Read the full email below:
Today we’re laying off over 1000 Epic employees. I'm sorry we're here again. The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the company funded. This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place.
Some of the challenges we're facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation's; and games competing for time against other increasingly-engaging forms of entertainment.
And some of our challenges are unique to Epic. Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we're only in the early stages of returning to mobile and optimizing Fortnite for the world's billions of smartphones; and in being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.
Since it's a thing now, I should note that the layoffs aren't related to AI. To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.
What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6. And we'll be kicking off the next generation of Epic with huge launch plans towards the end of the year.
This isn't our first time being here. Epic survived upheavals in 1990's with the move from 2D to 3D with Unreal 1; in the 2000's building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite. Each time, we rebuilt our foundations and earned a renewed leadership position.
Market conditions today are the most extreme we've seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side. That's what we're aiming to do for our players, and we aim to bring other like-minded developers in the industry along on the journey to build an increasingly open and vibrant future of entertainment together.
At Epic, we pride ourselves in only hiring the industry's best, so it is very painful to part with so many talented people. The folks impacted by the layoffs will receive a severance package that includes at least four months of base pay, with more based on tenure. We’re also extending Epic-paid healthcare coverage.
For example, in the U.S., they’ll receive paid coverage for 6 months. We’ll also accelerate their stock options vesting through January 2027 and extend equity exercise options for up to two years.
We'll have a company meeting Thursday to talk about the roadmap in more detail.
-Tim
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 follow the author on Bluesky.
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Just before end of financial year? Waiting for end of year report where they claim they made such and such profits.
$500 million in other cuts? That is no small figure! I wonder what they're cutting from. I have to imagine EGS will be part of it. Tim's expectation was that EGS would finally start to pull a profit by 2027. Almost a decade of just losses. Gotta wonder if EGS is on borrowed time now if Fortnite's dropping revenue continues.
Possibly. I've noticed the EGS weekly freebies have been much smaller and more obscure lately.
Oh man that's tough... Has he considered taking a 30% from EGS game sales instead of just 12%? Good games stores use that extra cash to stay afloat.
Could it be that the golden age of MMOs is simply starting to wane? All the failed launches recently and now this? The craze is over and only the most enthusiastic fans of the genre will remain?
If we put together all the layoffs from gaming for past years it would likely be an insane number.
1000 people, 1000 people gone in a moment.
More casualties of AI. -_-
The first paragraph immediately clarifies that this had nothing to do with AI. Fortnite just isn't making the same money it did before.
Couple that with Epic spending billions on fighting Apple/Google, and Epic Games Store, which they don't expect to turn a profit till at least 2027, if ever, and yeah, it's pretty obvious that they need to loosen up money.
V-Bucks also got a price increase across the board pretty recently.
I'm all for "hating AI" when it results in job loss or lack of creativity
But I wish people would stop jumping to conclusions and blame AI when it isn't relevant
If we don't keep up the hate towards AI we'll be even more overrun with AI shit, like economic collapse or deepfake child porn.
Just stick to facts, not conspiracies.
It's a fact.
Yes. It is a fact that you are pushing a conspiracy.
