Epic Games, the video game maker behind Fortnite, is laying off more than 1,000 workers amid “extreme” market conditions and a downturn in engagement with its most popular game, CEO Tim Sweeney said in a blog post Tuesday.
Its successful online video game Fortnite, which Epic developed in 2017, is now facing competition from “other increasingly-engaging forms of entertainment,” Sweeney said.
Fortnite, which is available on multiple platforms such as the Nintendo Switch and Sony PlayStation, offers a battle-royale format where players compete to be the last one standing. But weaker consumer spending and sluggish demand for new video game consoles have made the job cuts necessary, Sweeney said.
Other forces contributed too, he added — although not artificial intelligence.
“Since it’s a thing now, I should note that the layoffs aren’t related to AI,” Sweeney wrote. “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”
More companies have cited artificial intelligence in recent months when announcing layoffs, including Amazon and Pinterest. While AI has the potential to displace white-collar workers, there’s little evidence that it has so far led to widespread job losses, according to Anthropic researchers.
$500 million in cost savings
To keep the company funded, Epic needs to make “major cuts” as its spending is outpacing its revenue, he added. In addition to the layoffs, the company said it has identified more than $500 million in cost savings that will help stabilize it.
It’s currently working on optimizing Fortnite for mobile devices, where consumers increasingly engage with entertainment content.
Epic workers affected by the layoffs will receive at least four months of base pay as severance, plus health care benefits for six months in the U.S., the company said.
