What observers say
“We’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” said Tim Sweeney, CEO of Epic Games, as the company announced it would lay off over 1,000 employees. This drastic measure comes in response to declining engagement with Fortnite, which had over 650 million registered players worldwide in 2025, and broader challenges facing the gaming industry.
This latest round of layoffs marks Epic’s second major workforce reduction in three years, following a cut of about 830 jobs in September 2023, which represented roughly 16% of its workforce. The company now employs approximately 4,000 people, meaning the recent layoffs account for about 20% of its total workforce. The decision to reduce staff is part of a broader strategy to save $500 million by cutting contracting and marketing expenses and eliminating open roles.
Despite Fortnite’s massive player base, the average playtime has sharply declined, indicating that even popular games are struggling to maintain player engagement in a rapidly evolving digital landscape. Epic Games is not only competing with other gaming titles but also with social media and various forms of online entertainment that vie for players’ attention.
In light of these challenges, Epic Games is preparing to transition from Unreal Engine 5 to Unreal Engine 6, which may provide new opportunities for innovation and growth. However, the company is still in the early stages of returning to mobile gaming after legal battles with tech giants Apple and Google, which adds another layer of complexity to its recovery efforts.
Reflecting on the company’s history, Sweeney noted, “This isn’t our first time being here. Epic survived upheavals in the 1990s with the move from 2D to 3D with Unreal 1; in the 2000s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite.” This historical resilience suggests that while the current situation is dire, there may be potential for Epic to emerge stronger from these challenges.
As Epic Games navigates this turbulent period, the focus will be on how it adapts to the changing landscape of the gaming industry and whether it can reclaim its position as a leader in digital entertainment. The coming months will be critical for the company as it implements these significant changes and seeks to stabilize its operations.
