The True Post (Web News)The popular video game company **Epic Games** has announced that it will lay off more than 1,000 employees due to a decline in user engagement in its most famous game, **Fortnite**. The move is intended to reduce the company’s financial challenges, control expenses, and stabilize the organization.
In a note to employees, the company’s Chief Executive Officer, **Tim Sweeney**, said, “We are currently spending significantly more than we are earning, and major measures are necessary to keep the company financially sustainable.” He added that by reducing contracting and marketing expenses and eliminating some open roles, the company expects to save approximately $500 million USD.
**Fortnite**, which became hugely popular worldwide during the COVID-19 pandemic, is now facing difficulties due to a steady decline in user engagement. This is particularly true for games that operate as **live-service titles**, which require expensive, continuous new content to retain players, but are now struggling to attract and maintain their audience.
Tim Sweeney stated, “We have faced challenges in consistently delivering the Fortnite experience, and current market conditions are the most extreme the company has seen to date.” He clarified that the layoffs are **not related to artificial intelligence (AI)**, as some in the industry have speculated, but are instead due to the company’s financial situation and the decline in player activity.Additionally, Epic Games recently increased the price of **Fortnite’s in-game currency** to cover the rising costs of running the game.
This is the second major round of layoffs for Epic Games in the past three years. In September 2023, the company laid off approximately 830 employees, which represented about 16 percent of its workforce.Industry analyst Mat Piscatella noted that last month Fortnite topped the list of monthly active players on PlayStation and Xbox in the U.S., but the average playtime per user dropped sharply.
Other major video game companies have also conducted layoffs. In September 2023, **Electronic Arts** laid off hundreds of employees and canceled development of the Titanfall game. Similarly, last year, Amazon’s large-scale layoffs affected its gaming division.Furthermore, rising semiconductor prices have added challenges to the industry, as increasing demand from AI data centers limits supply, forcing console manufacturers to raise prices.
