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Epic Games is undergoing significant restructuring, resulting in layoffs affecting approximately 830 employees, as confirmed by an email from CEO Tim Sweeney posted on the company’s website.
This move accounts for roughly 16% of the workforce. Of these job cuts, around 250 employees are connected to Epic’s divestiture of Bandcamp and SuperAwesome.
The decision to reduce the workforce comes as a response to Epic’s financial situation.
Sweeney acknowledged that the company has been operating at a deficit, attributing it to their investments in the development of the Epic ecosystem and the growth of Fortnite as a metaverse-inspired platform for content creators.
While Fortnite is seeing renewed growth, it relies heavily on creator content with a substantial revenue-sharing model, which has lower profit margins compared to the early days when Fortnite Battle Royale funded their expansion.
This shift in business model necessitated a major structural change in the company’s financial approach.
Sweeney emphasized that Epic had been making continuous efforts to trim costs globally, such as freezing new hiring and reducing expenses in areas like marketing and events.
However, these efforts fell short of achieving financial sustainability, prompting the layoffs as a necessary step to stabilize the company’s finances.
Employees affected by the layoffs will receive a severance package consisting of six months’ base pay and six months of Epic-paid healthcare, applicable in the US, Canada, and Brazil.
Additionally, Epic is offering an accelerated stock option vesting schedule until the end of 2024, granting two extra years for option exercise.
In the US, they are also allowing unearned profit sharing from employees’ 401k accounts to vest.
The company will provide support for career transition services and visa-related matters where feasible.
Epic has asserted that these layoffs mark the conclusion of their restructuring efforts and will bring financial stability to the company moving forward.
This decision coincides with their ongoing legal battle with Apple over antitrust issues and a recent announcement that Fortnite’s in-game currency, V-Bucks, will see a price increase due to inflation.
