Epic Games lays off 15% of staff citing “unrealistic metaverse ambitions”

Epic Games, the publisher of Fortnite and developer of Unreal Engine, announced a major round of layoffs that will cut around 16% of its workforce, affecting roughly 830–870 employees across the company. In an internal memo, CEO Tim Sweeney said Epic had been “spending way more money than we earn” while investing heavily in Fortnite as a “metaverse-inspired ecosystem for creators” and building out broader metaverse ambitions, and acknowledged that his expectation the company could absorb these costs without layoffs was “unrealistic.” The cuts reportedly fall largely outside core development teams, and are accompanied by moves to sell music platform Bandcamp and spin off most of kids’ digital safety firm SuperAwesome. The restructuring highlights the financial strain of large-scale metaverse bets even for a company with one of the world’s most profitable games. Epic has been pushing a creator-focused model inside Fortnite, sharing a greater portion of revenue with user-generated content creators, which Sweeney said has structurally reduced the company’s margins even as the ecosystem grows. According to his memo, Epic had already tried to reach “financial sustainability” through hiring freezes and reduced marketing and events spending, but concluded that workforce reductions were necessary to stabilize the business while it continues pursuing its goal of being a leading metaverse company. The layoffs add to broader doubts around the commercial viability and timing of metaverse strategies across the tech and gaming sectors, even as Epic maintains that it still believes in the long-term vision.

✨ AI-generated background, compiled from web sources — not editorial content.

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