Epic Games is cutting more than 1,000 employees as the company says Fortnite engagement has dropped hard enough that it is now spending “significantly more” than it makes.
Via the Epic Games website, CEO Tim Sweeney confirmed the layoffs on Tuesday, March 24, and said the cuts, along with more than $500 million in savings tied to contracting, marketing, and open roles, are meant to stabilize the company.
Epic said the layoffs are not related to AI.
Epic blames Fortnite slowdown and wider industry problems
According to Sweeney, the downturn in Fortnite engagement started in 2025.
He said Epic is being hit by slower growth across gaming, weaker consumer spending, tougher cost economics, lower current-gen console sales compared with the last generation, and competition from other forms of entertainment fighting for players’ time.
Epic also admitted some of the problems are specific to Fortnite.
Sweeney said the company has struggled to deliver “consistent Fortnite magic with every season,” while also still being in the early stages of rebuilding its mobile presence and optimizing the game for smartphones around the world. Fortnite only recently returned to Google Play on March 19, which Epic had framed as a major step for its mobile push.
About 20 percent of Epic is gone
Reports say the layoffs represent about 20 percent of Epic’s workforce.
The company is expected to be left with around 4,000 employees after the cuts.
This is also the second major round of layoffs in recent years, following the 830 jobs Epic eliminated in 2023.
Fortnite engagement is slipping
Reuters, citing Circana data shared by analyst Mat Piscatella, reported that Fortnite led U.S. monthly active users on both PlayStation and Xbox in February 2026, but average playtime fell year over year.
PlayStation users averaged 16 hours in February, down from 21 hours in February 2025, while Xbox users averaged 15 hours, down from 19 hours.
Epic has also been making monetization changes.
Earlier this month, the company announced a V-Bucks price increase that reduced the number of V-Bucks players receive for the same dollar amount across major purchase tiers, including Fortnite Crew changes. That move now looks like another sign Epic was trying to patch the numbers before pulling the trigger on deeper cuts.
Epic says the answer is more Fortnite and better tools
Sweeney laid out the company’s next step plainly.
Epic plans to double down on Fortnite with fresh seasonal content, gameplay, story, and live events.
At the same time, it wants to push its developer tools forward as it moves from Unreal Engine 5 and UEFN toward Unreal Engine 6.
Sweeney also teased “huge launch plans” for later this year.
“What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6. And we’ll be kicking off the next generation of Epic with huge launch plans towards the end of the year,” he said.
