Epic Games Lays off 1,000 Employees Due To 'Fortnite' Slump

Epic Games, which is literally printing money thanks to its highly addictive game Fortnite, will still have to lay off employees.

Citing a “downturn in Fortnite engagement,” Epic Games announced it will have to lay off 1,000 employees. Along with the layoffs, Epic Games will also be shutting down three Fortnite modes:

Rocket Racing – October

Ballistic – April 16

Festival Battle Stage – April 16

In a memo sent to employees on Tuesday, Epic Games CEO Tim Sweeney revealed that they won’t be seeing many of their fellow employees in the office.

“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,” Sweeney said. “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.”

The announcement of layoffs comes as Epic Games reportedly made $6 billion in revenue in 2025, while also securing a $1.5 billion investment from its close partner Disney 2 years ago, with the hopes of creating a Fortnite universe full of Disney IP, which already has made appearances throughout different seasons of the game.

Sweeney also compared the current climate of the gaming industry to that of the 1990s, when it faced a similar technological disruption, when new tech like Epic’s Unreal Engine first hit the scene.

“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,” said Sweeney.

According To Sweeney, AI Is Not The Culprit

Sweeney also made sure to add that none of these layoffs had anything to do with AI, telling employees, “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.”

Social media had thoughts about the latest round of layoffs in the gaming industry; you can see those reactions below.

This sounds like a potential problem for Epic Games & Fortnite