The recent round of layoffs at Epic Games impacted its office in Bellevue, Wash., with 39 employees affected, according to a new filing with the Washington state Employment Security Department (ESD).
Epic, headquartered in Raleigh, N.C., is arguably best-known as the developer behind the popular online shooter Fortnite. It’s also the creator of an eponymous digital storefront for PC games and the publisher of the Unreal Engine, a high-end toolkit for game development and 3D modeling.
On Sept. 28, Epic CEO Tim Sweeney notified employees via an internal email, later posted to Epic’s public blog, that Epic would lay off “around 16%” of its workforce. This amounts to approximately 830 workers. In addition, Epic has sold its recently-acquired subsidiary Bandcamp and spun off UK-based engagement company SuperAwesome into its own, largely independent entity.
“For a while now, we’ve been spending way more money than we earn,” Sweeney wrote, “investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Affected employees, per Sweeney’s memo, have received a severance package that includes career transition services and six months’ base pay and healthcare.
Sweeney further stated that Epic’s revenue issues were driven by a change in focus for Fortnite, where its growth is now driven “primarily by creator content with significant revenue sharing.” This has seen Fortnite evolve once again, from its initial release as a co-op team shooter, to its free-to-play player-vs.-player Battle Royale mode, which is what grew it to its dominant place in the genre, to its current position as an effective metaverse platform via Fortnite Creative.
“We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans,” Sweeney wrote.
“Some of our products and initiatives will land on schedule, and some may not ship when planned because they are under-resourced for the time being,” he continued. “We’re OK with the schedule tradeoff if it means holding on to our abiity to achieve our goals, get to the other side of profitability and become a leading metaverse company.”
Epic Games opened a Seattle-area studio in 2012 to pursue development and QA on Unreal. In 2017, Epic leased 25,000 square feet of office space in Bellevue’s Lincoln Square, where it works out of the same building as Valve Software and the American offices of the Pokémon Company.
Epic still has five job openings at the Bellevue office.
Epic acquired 13 companies between 2019 and 2022, including Kirkland, Wash.-based codec creator RAD Game Tools; artist marketplace ArtStation; the parent company of Mediatonic, the UK-based studio behind the hit viral game Fall Guys; and Psyonix, the developer of Rocket League.
