Epic Gamesdeveloper of several successful games including Fortnite, has laid off 16% of its workforce globally. Around 830 workers will therefore lose their jobs in the company, in a step that its CEO, Tim Sweeney has described as inevitable in an open letter to its employees.
In it he also acknowledged that Epic Games has been spending significantly more money than it earns. For his managers, «layoffs were the only way» to get out of the situation, and that «Doing it now and at this scale will stabilize finances«.
Workers affected by the measure will receive a compensation package consisting of six months of base salary and healthcare payment. In addition, the company has also offered to accelerate employees’ stock option rights that expire throughout 2024, in addition to giving two more years to use the options. Approximately two-thirds of the layoffs have affected teams other than core development teams.
Sweeney stressed that Epic Games has been working to reduce costs not just by freezing hiring. They have also cut expenses in areas such as marketing and events. Furthermore, as part of his plans for the future, Sweeney has highlighted that he wants the company to focus on developing infrastructure so that its games can exist in the metaverse ecosystem. For example, with actions such as the development of an immersive digital experience for children with Lego.
Epic Games He is also getting rid of Bandcampan online music platform that it bought in the middle of last year, and that will coordinate its sale to the music licensing platform Songtradr. The same will happen with SuperAwesomea developer of children’s titles that it bought in 2020. In this case, the company is going to be divided into several parts to outsource some of them.
Additionally, its advertising business will become a separate company, although its Children’s Web Services areas, with parental verification and consent management tools, will remain with Epic.
These steps may reduce the pressure that investors like Sony or Tencent are putting on Epic Games, but they do little to solve several problems it has. Among them, the one that confronts it with the Apple and Google app stores, where Fortnite continues to be excluded.
Despite everything, Sweeney assures that «expectations for Epic’s future are strong» because of Fortnite and its Unreal engine. Of course, some of his projects may suffer delays due to the resource restrictions they have had to implement. But they are going to cut funding to their main projects.