Two and a half years ago, Epic Games CEO Tim Sweeney broke the sad news that nearly a thousand of the company’s employees would be laid off.
“For some time now, we’ve been spending far more money than we make, investing in Epic’s next evolution and building Fortnite into a metaverse-inspired developer ecosystem.” Sweeney said on September 28, 2023. “I have long been optimistic that we could make this transition without layoffs, but in retrospect I think that was unrealistic.”
The number of layoffs was “approximately 830 employees, or 16% of jobs,” according to Sweeney. Earlier this week, over 1,000 more Epic employees were laid off, according to a statement from Sweeney on the Epic Games website.
A simple calculation will tell you that if 830 people make up 16%, the total number of jobs at Epic before the 2023 layoffs was about 5,000. Subtracting that and this week’s layoffs would bring the total to just over 3,000 – but that assumes there have been no additional hires (or people leaving the company) in the meantime. The layoff of 1,000 people makes headlines; Hiring hundreds, especially over a three-year period, is not the case.
In fact, an Epic spokesperson has said that the company still has 4,000 employees, but whatever the actual number is, it’s astonishing that the company behind one of the most successful games in history just laid off 20 to 25% of its workforce. If Epic does that, what chance does anyone else have?
Good night
Fortnite’s fortunes may be epic, but even that has its limits. As Sweeney said in his statement, it’s making less money than it did when the battle royale game “took off and began to fund our expansion.” This is how it is with most games, no matter how great the initial success. It depends on what you do with that growth revenue.
While much of that went back into Fortnite, more than a few cents were spent on what can only be described as Tim Sweeney’s vanity projects. The Epic Games Store first emerged in late 2018. It was intended as a competitor to Steam, leveraging Fortnite’s massive war chest to attract exclusive games and weekly free games, many of which are claimed – at Epic’s expense – by users who had little or no intention of playing them.
Seven years later, the Epic Games Store is still the odd man out among video game storefronts. While the base numbers paint a competitive picture – 78 million monthly active users for EGS in 2025, compared to 132 million for Steam – those user revenues are still heavily skewed towards Epic’s own titles, most notably Fortnite.
Epic said it reported $400 million in third-party spending is massively dwarfed by Steam’s $16.2 billion for the year. Epic’s total does not include in-game payments from games that process their own revenue, while the total comes from Valve from analysis companiesnot Valve itself, and includes all revenue including Valve’s games, but even halved it would still be 20 times what the Epic Games Store brings in.
A little over two years ago, it was reported that the Epic Games Store is still not making a profit even after five years of operation. At least the plan As of 2021was that it would turn a profit from 2027, although there is little reason to believe that will be the case until next year. If that were possible, we probably wouldn’t be seeing all these layoffs.
This revelation came to light during one of Sweeney’s other white whales: his long-running lawsuit against Apple. He portrays it as a fight for “freedom,” when in reality it’s simply an attempt to grab a bigger share of the money, both for his company and for others who use the App Store.
Whatever the taste, freedom always comes at a price. In a real fight for freedom you can measure that in blood, but in this case it’s just money. The ridiculous project, dubbed “Project Liberty,” was expensive, although Sweeney said he “took steps to reduce our legal costs.”
As Sweeney put it in his statement last week, “We spend significantly more than we earn,” which includes not only legal fees but also $2.1 billion paid out to developers using the Epic Games Store, according to reports, starting in mid-2025.
I’m sure the laid-off developers will be happy to have been part of Epic’s heroic struggles when they send out resumes in the coming weeks.
Unrealistic expectations
Maybe I’m being too strict with Epic. They’re hardly the first gaming company to experience explosive growth in recent years, hiring a lot of people and then firing many of them when things slowed down.
Epic’s meteoric rise began in 2017 with the launch of Fortnite, but a number of gaming companies experienced something similar, albeit on a smaller scale, during the pandemic years of 2020-21. We’ve been reading about layoffs everywhere in recent years, and this trend is unlikely to stop any time soon.
It’s possible that the games industry as a whole was simply over-employed half a decade ago and is now realizing that the sustained growth it was aiming for back then is simply not possible. Added to this is the economic downturn that we are all experiencing as a result (waves hands toward Washington, DC) and it’s likely we’ll see more of it in the coming years, both in gaming and elsewhere. Even now, a search for “layoffs” in our article archives returns 46 results for the last two years, and this site only covers a limited selection of games and game companies.
On the other hand, not every company out there has taken advantage of their immense good fortune to pursue goals that have depleted even the seemingly infinite reserves of a worldwide sensational hit game without offering much in return to the most important shareholders that every gaming company has: its employees and players.