'Fortnite' Maker Epic Games Reveals Mass Layoffs, Says AI Isn’t to Blame

Epic Games announced connected Tuesday that it volition laic disconnected much than 1,000 employees, and CEO Tim Sweeney addressed the technological elephant successful the room: artificial intelligence.

“Since it’s a happening now, I should enactment that the layoffs aren’t related to AI,” Sweeney wrote successful a memo to unit that was besides posted publicly. “To the grade it improves productivity, we privation to person arsenic galore awesome developers processing large contented and tech arsenic we can.”

Launched successful 2017, the fashionable conflict royale shooter, Fortnite, reportedly had implicit 650 million registered players worldwide successful 2025. In the memo, however, Sweeney said a diminution successful Fortnite engagement that began successful 2025 near Epic spending “significantly much than we’re making,” forcing the institution to marque large cuts to support the concern afloat.

While Sweeney did not elaborate connected the crushed for mentioning AI, 1 crushed whitethorn prevarication successful the company’s clasp of the technology. In 2023, Epic Games recovered itself astatine likelihood with Valve, the creator of Steam, implicit the use of generative AI successful games, with the Fortnite shaper allowing games developed utilizing the exertion connected its Epic Games Store marketplace.

The layoffs, the institution said, are portion of a broader cost-cutting effort, with implicit $500 cardinal additionally saved by reducing contracting, cutting selling spending, and leaving immoderate roles unfilled. Sweeney compared the infinitesimal to earlier moments successful the company’s history, including its displacement from 2D to 3D games successful the 1990s and aboriginal determination into online titles specified arsenic Fortnite.

“Market conditions contiguous are the astir utmost we've seen since those aboriginal days, with monolithic upheaval successful the manufacture accompanied by monolithic accidental for the companies that travel retired arsenic winners connected the different side,” Sweeney wrote. “That's what we're aiming to bash for our players, and we purpose to bring different like-minded developers successful the manufacture on connected the travel to physique an progressively unfastened and vibrant aboriginal of amusement together.”

Sweeney besides noted the existent console procreation is selling less units than its predecessor, and that games progressively vie with different integer amusement for players’ time.

Since the nationalist motorboat of ChatGPT and Midjourney successful 2022, the gaming manufacture has grappled with the determination of whether oregon not to incorporated generative AI successful crippled development. Some creators had antagonistic takes: In December, erstwhile Grand Theft Auto developer Dan Houser compared the exertion to “mad cattle disease.”

Despite nationalist pushback against the usage of AI successful gaming, a report published by Google Cloud past twelvemonth said 9 successful 10 crippled developers said they were already utilizing AI agents successful their work. Major crippled publishers similar Electronic Arts, Square Enix, and Krafton person publically embraced AI successful caller years arsenic manufacture layoffs person swelled.

Some challenges, Sweeney noted, however, are circumstantial to Epic Games.

“Despite Fortnite remaining 1 of the astir palmy games successful the world, we’ve had challenges delivering accordant Fortnite magic with each season; we're lone successful the aboriginal stages of returning to mobile and optimizing Fortnite for the world's billions of smartphones,” helium wrote.

Affected employees, Epic said, volition person astatine slightest 4 months of basal pay, six months of company-paid healthcare for U.S. workers, and accelerated stock-option vesting done January 2027.

Despite the layoffs, Epic plans to proceed investing successful its technology, with Sweeney noting that the institution is preparing to modulation from Unreal Engine 5 and Unreal Editor for Fortnite toward Unreal Engine 6 arsenic portion of its adjacent phase. Unreal Engine is utilized wide crossed not lone the gaming industry, but besides successful amusement projects of each sorts.

“In being the industry's vanguard we person taken a batch of bullets successful a conflict which is lone successful the aboriginal days of paying disconnected for ourselves and each developers,” Sweeney said.

Epic Games did not instantly respond to Decrypt’s petition for comment.