Epic will lay off about 830 people, or 16% of its employees. (Image: 123RF)
Epic Games, maker of the popular video game Fortnite, on Thursday announced a social plan to save money, even as it continues to spend money on its legal battle against Apple and Google.
Epic will lay off about 830 people, or 16% of its employees, according to a copy of an email sent by CEO Tim Sweeney to employees and posted on the company’s website.
“For some time now, we’ve been spending a lot more money than we make, investing in the next iteration of Epic and growing Fortnite as a Metaverse-inspired ecosystem for creators,” Tim Sweeney told employees.
“I have long been optimistic that we could move forward without layoffs, but in retrospect I realize that was not realistic.”
Fortnite’s growth has resumed, but it’s driven by creator content, which means a significant revenue share for the company, according to Tim Sweeney, who founded the company in the 1990s.
“The success of the creator ecosystem is a great achievement, but it means a major structural change in our economic model,” he said.
According to the Director General, layoffs are the only way to achieve financial stability, even if it will lead to a delay in development.
“Some of our products and initiatives will be delivered on schedule, while others will not be delivered due to a lack of resources at this time,” Tim Sweeney noted.
He also noted that although Epic has taken steps to reduce legal costs, the company “continues to fight the distribution and tax monopolies imposed by Apple and Google.”
Epic has been fighting Apple and Google in US courts for years over rules and fees imposed by their app stores, which allow consumers to download video games like Fortnite onto their smartphones and tablets.
Epic also decided to sell Bandcamp, the online music store it acquired early last year, and spin off its advertising business to another unit, according to the email.
“Hardcore beer fanatic. Falls down a lot. Professional coffee fan. Music ninja.”