Epic Games, the company known for Fortnite, is cutting approximately 830 employees, which accounts for 16% of its workforce. This decision is attributed to the company's over-optimistic revenue expectations from its Metaverse project, leading to excessive spending that far exceeded income.
In a memo dated September 29, Epic Games CEO Tim Sweeney explained that these layoffs are necessary to stabilize the company's financial situation. Sweeney noted that while he initially held an optimistic outlook that this transition could occur without reducing the workforce, it has now become evident that this was an unrealistic expectation.
Sweeney also acknowledged that the success of the Fortnite Creator Program, which allows players to create and sell their own in-game content with a 40% revenue share, had contributed to the company's growth. However, this shift in focus has led to lower profit margins and significant structural changes to the company's economic model.
Aside from the layoffs, Epic Games plans to part ways with 250 additional employees. The company has also announced its intention to sell Bandcamp, a recently acquired music platform, and to spin off SuperAwesome, its marketing subsidiary. SuperAwesome specializes in child safety technology and was integrated into Epic Games in 2020.
Importantly, employees who are departing from Epic Games will receive six months of severance pay, and those in the United States, Canada, and Brazil will continue to receive six months of healthcare coverage.
In addition to Fortnite, which boasts approximately 400 million registered users, Epic Games is well-known for Unreal Engine, a game development kit used in popular titles such as God of War and PlayerUnknown's Battlegrounds.
