Epic Games Lays Off 1,000+ Employees, Shuts Down 3 Fortnite Modes Amid Engagement Drop

Epic Games has announced a major round of layoffs, confirming that over 1,000 employees are being let go starting today. The move comes as the company faces mounting financial pressure, driven in part by a reported decline in Fortnite engagement since 2025.

In a statement shared publicly on a blog post, Epic Games CEO Tim Sweeney addressed the decision. Here’s a part of Sweeney’s statement:

Today we’re laying off over 1000 Epic employees. I’m sorry we’re here again. The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded. This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place. Some of the challenges we’re facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other increasingly-engaging forms of entertainment.

Epic says the layoffs aren’t related to AI

Some of Epic’s challenges also appear to be internal. Despite Fortnite still being one of the most successful games globally, the company admits it has struggled to deliver that same consistent “Fortnite magic” with every season.

It also notes that its return to mobile is still in early stages, alongside ongoing efforts to optimize the game for billions of smartphone users worldwide. On top of that, being at the forefront of the industry has come with its own setbacks, with long-term bets that are only now starting to take shape.

The company also clarified that these layoffs are not related to AI. Instead, Epic says it views AI as a tool to improve productivity, intending to enable more developers to focus on building better content and technology. Epic further says affected employees will receive severance packages

Three Fortnite modes are also scheduled to shut down permanently

That being said, the company is also making bigger changes to its portfolio. Several Fortnite experiences are set to shut down in 2026, including Rocket Racing in October, while Ballistic and a Festival mode will be discontinued as early as April.

Article feature image source: Epic Games