Fortnite developer Epic Games Inc. has announced that it will be laying off 16% of its workforce, which amounts to 870 employees. Alongside this decision, the company revealed plans to divest Bandcamp, an online audio-distribution platform it acquired last year, and spin off most of its SuperAwesome subsidiary.
In an email sent to employees on Thursday, Epic CEO Tim Sweeney expressed his regret over the layoffs, attributing them to the fact that the company has been spending more money than it earns. Sweeney had initially hoped that they could weather this transition without resorting to layoffs but has since realized this was not feasible.
Efforts to reduce costs through minimal hiring and cutting back on marketing and events have proven insufficient for Epic’s financial sustainability, leading to the conclusion that layoffs are necessary. Sweeney emphasized that taking this action now, on this scale, will stabilize the company’s finances.
Despite ongoing legal battles with Apple Inc. over App Store policies, including a hefty commission fee of up to 30%, Epic remains committed to delivering upcoming Fortnite releases – Del Mar, Sparks, and Juno – on schedule.
Recently, Epic filed a request with the U.S. Supreme Court to review a California court ruling that deemed Apple’s App Store policies did not violate antitrust laws. This move marks another chapter in the ongoing legal dispute between the two companies, with billions of dollars at stake in relation to how Apple operates its App Store.