Video game giant Epic Games, maker of Fortnite, has announced a significant workforce reduction, impacting approximately 870 employees, which constitutes about 16% of its staff.
Video game giant Epic Games, maker of Fortnite, has announced a significant workforce reduction, impacting approximately 870 employees, which constitutes about 16% of its staff.
The company also revealed plans to divest Bandcamp, an online audio distribution platform acquired last year, and spin off the majority of SuperAwesome, a child-friendly technology developer acquired in 2020. This development was initially reported by Bloomberg.
In a memo to staff, Epic Games CEO Tim Sweeney acknowledged the company’s excessive spending in comparison to earnings, driven by investments in evolving the company and expanding Fortnite into a metaverse-inspired creator ecosystem. Sweeney expressed optimism about navigating this transition without layoffs, but conceded this hope was unrealistic in hindsight.
Sweeney highlighted ongoing efforts to reduce costs, including a freeze on hiring and reductions in operational spending for areas like marketing and events.
Despite these measures, the company fell short of achieving financial stability, leading to the decision for layoffs. Sweeney emphasized that these workforce changes, made on this scale and at this time, are essential to stabilizing the company’s finances.
Regarding Bandcamp and SuperAwesome, Bandcamp will integrate with Songtradr, a music marketplace company. SuperAwesome’s advertising business will operate as an independent entity under the SuperAwesome brand, led by its current CEO Kate O’Loughlin.
Fortnite maker, Epic Games aims to streamline operations without compromising development or core businesses. Sweeney assured that essential projects, including the upcoming Fortnite Season and Fortnite Chapter 5 releases, will proceed according to schedule.
This announcement coincides with Epic’s disclosure that Fortnite V-Bucks will see a price increase in the United States and several other countries on October 27. The company attributed this adjustment, averaging 12% to 15% per bundle, to economic factors like inflation and currency fluctuations.
Simultaneously, Epic has filed a cert petition with the Supreme Court, seeking a review of a 2021 ruling on Apple’s App Store policies. If the Supreme Court takes up the case, it would reignite the legal dispute between Epic and Apple that began in August 2020.
In a statement, Epic emphasized its commitment to combatting what it perceives as distribution monopolies and taxes by Apple and Google, underscoring its dedication to fostering a thriving metaverse that benefits all developers, including Epic.