Despite the massive popularity of Fortnite, Epic Games says it is now spending more money than it’s bringing in.
As a result, the company announced Tuesday that it is laying off more than 1,000 employees, according to a note sent to staff and published online by founder and CEO Tim Sweeney. Epic also identified more than $500 million in cost savings across contracting, marketing, and unfilled roles that it says will put the company in a more “stable place.”
In the note, Sweeney points to a slowdown in Fortnite engagement that began in 2025, along with broader industry challenges as culprits for the layoffs. These challenges include slower growth, weaker consumer spending, tougher economics, and increased competition from other forms of entertainment. He also notes that current game console sales are trailing the previous generation.
Sweeney suggests Epic’s long-running legal battles with Apple and Google over mobile app store policies have also taken a toll. Fortnite was removed from both companies’ mobile app stores for several years after Epic introduced its own third-party payment system. The game returned to Apple’s App Store in 2025 and to the Google Play Store earlier this month.
Sweeney wrote in the note the company is still “only in the early stages of returning to mobile.” He added, that the company has “taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.”
One thing Sweeney does not blame is AI.
“Since it’s a thing now, I should note that the layoffs aren’t related to AI,” Sweeney wrote. “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”
That stance contrasts with other tech companies that are pouring billions into AI while cutting staff and aiming to operate with smaller, more “agile” teams. Amazon, Vimeo, Pinterest, and Block have all announced layoffs earlier this year. Block CEO Jack Dorsey has even gone as far as suggesting that AI is capable of replacing a significant share of his company’s workforce.
Looking ahead, Sweeney said Epic plans to focus on building “awesome Fortnite experiences build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events.”
Fortnite, which started as a battle royale game, has evolved into a broader social platform that some have described as a real metaverse, with user-generated content, brand tie-ins, and live events like concerts.
But even as Epic is refocusing its efforts to improve Fortnite, it is scaling back some aspects of the game.
In a post on X, the company said it is shutting down several Fortnite modes, including Rocket Racing, Ballistic, and Festival Battle Stage. The move comes as Meta has gone back and forth on whether to shut down its virtual reality social platform Horizon Worlds.
“We’ve built a lot of Fortnite modes, and in some cases we failed to build something awesome enough to attract and retain a large player base,” the post reads.
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