Epic Games is enduring a major round of layoffs. The company behind titles like Fortnite and Gears of War is letting go of 16% of its workforce, or approximately 830 employees.
The CEO of Epic Games, Tim Sweeney, announced the layoffs in a letter published on his company’s website. Bloomberg viewed the letter before it went live.
Sweeney attempted to justify the pink slips by pointing to the major investments Epic Games is making in its creator community. The publisher is positioning its biggest property, Fortnite, as a competitor to the sandbox engine Roblox. To encourage players to build and inhabit virtual worlds, Epic Games launched a creation tool called the Unreal Editor and established a creator program that delivers 40% of resulting revenue to partners.
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Fortnite‘s creator-friendly policies are encouraging, but they’re not free. To support them, Epic Games has opted to lay off employees in other divisions. “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,” Sweeney wrote. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
As part of its layoffs, Epic Games will divest two of its properties. The audio service Bandcamp, which Epic Games acquired last year, will be sold to Songtradr for an undisclosed sum. Epic Games will also end its three-year tenure as the parent company of SuperAwesome. The firm focused on internet safety will revert ownership back to its leadership team.
Epic Games is not the only tech company that announced a round of layoffs during the final week of September. That unfortunate group also includes Snap, which let go of around 170 employees as it looks to improve its financial situation.
