Epic Games is laying off 1,000 employees. The cause is declining profitability due to a drop in Fortnite's player engagement.

Epic Games announced on the 24th (local time) that it is carrying out a large-scale reduction of over 1,000 staff members. This restructuring is a cost-cutting measure due to worsening profitability. Along with the layoffs, it was revealed that three Fortnite modes—Rocket Racing, Fall Guys (Ballistic), and Festival Battle Stage—will be taken offline. The Rocket Racing UEFN islands will cease operations in October, while Ballistic and Festival Battle Stage will end service on April 16.

In a company memo, Epic Games CEO Tim Sweeney explained that Fortnite's user numbers have been consistently declining since last year, causing expenses to significantly outpace revenue, making cost-cutting and layoffs inevitable. He added that external factors, such as a broader industry slowdown, reduced consumer spending, and sluggish console sales, also contributed to the decision.

Furthermore, he clarified that these layoffs are unrelated to the adoption of Artificial Intelligence (AI). While acknowledging the potential of AI for improving productivity, he maintained that it is not the direct cause of the workforce reduction. This is interpreted as a message to distance the company from the ongoing debate in the gaming industry regarding AI replacing human talent.

Epic Games' future direction was also presented. The company plans to seek a rebound by strengthening the core Fortnite experience and transitioning from Unreal Engine 5 and UEFN to Unreal Engine 6. A company-wide meeting will be held on the 26th to explain the roadmap in detail.

Meanwhile, Epic Games will provide a package to affected employees, including at least four months of severance pay and extended health insurance coverage.