Epic Games, the studio behind Fortnite, is slashing more than 1,000 jobs as it deals with a “downturn” in engagement with its flagship game.
Epic CEO Tim Sweeney announced the cuts to staff Tuesday.
“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 wrote. “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.”
Epic, of course, is a close partner of The Walt Disney Co., which invested $1.5 billion in the company two years ago, with plans to create a Fortnite-connected universe filled with Disney IP and characters. Disney characters have also made frequent appearances in limited edition Fortnite seasons.
Sweeney is also close to new Disney CEO Josh D’Amaro, who championed the Epic Games deal. Sources close to D’Amaro said that interactivity will be a centerpiece of his strategy for the company.
Sweeney told The Hollywood Reporter after D’Amaro got the job that the exec understood how gaming and entertainment can work together harmoniously.
“Josh and Disney really get it and have a crisp understanding of how the future of their film and TV IP, Disney+ and games fit together into a digital ecosystem and tie into parks and other things,” he says.
In his memo, Sweeney compared the current moment to the 1990s, when technological disruption similarly changed the course of the gaming industry. Epic was a player then thanks to its Unreal Engine.
“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,” Sweeney wrote.
He also took pain to note that “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.”
