Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
I am not Tim Sweeney's biggest fan. I know he and his company have many detractors. Please read this comment with that in mind, because while I don't love them, I also think that as layoff announcements go, this is good. No beating around the bush, explicitly NOT blaming AI, taking responsibility, taking care of those impacted. If you are gonna do it, this is as good as it can get.
I think the reality is that Epic got big because of Fortnite but nothing lasts forever. They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way): going silent and making whatever they wanted for a while, and then trying to repeat the cycle, rebuilding the chest, and then going on. Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
Meanwhile, Epic has many stable and valuable businesses - Unreal, the game store, etc. - which are perfectly capable of sustaining a sizable company. Just not one as sizable as Epic is. The best case for them is they figure that out, and manage to make a sustainable go of it doing that.
As far as layoff packages go, this is pretty good. 6 months health insurance and at least 4 months pay. The last 2 layoffs I experienced were just 1 week pay for every year you worked there and zero extended health benefits. And they made sure to note that they didn’t have to pay out anything at all, legally.
The wording of the announcement is better than the usual corporate non-speak too.
> they didn’t have to pay out anything at all, legally.
And still the overwhelming sentiment on HN is that unions are worthless.. When my company had layoffs the laws (thanks to the unions) made it favorable to us without needing the goodwill of the company. Additionally, representatives from the union were involved in all steps and made sure everything went as it should.
I’ve wondered how much money was burned on Tim Sweeneys quixotic quest to re-create the Steam store. I know a lot of people who would religiously download the “free games” but never spent a cent.
The Epic Games store/browser is awful. I have bought one (insanely discounted) game on it and get all the free games, because i like to collect videogames. But i almost never play them, because the application is super slow. Steam has absolutely the best application, then (with a huge enormous gap) comes Gog, Amazon, Xbox, EA, Ubisoft and Epic at the rock bottom. I don't use Blizzards program, so i can't judge on that one.
Starting thinking of it as collection licenses to maybe install games, assuming the license is still valid when you finally get around to playing it. And your account is still valid. And the servers are still running. And your operating system will still run it. etc.
Maybe just get off the train. Your numbers add to the awful business model these games are built on.
I think the following is the bare minimum to compete with Steam at this point:
1. Store with discoverability,
2. A functional cart feature at launch
3. A wishlist with notifications for discount
4. Relatively high download speeds (500Mbps at least)
5. Friends list and activity feed
6. Achievements
7. An equivalent to steam input API
8. Regional pricing with robust payment options
9. Development/Beta build distribution as easy as steam.
10. A useful in-game overlay with at least performance metrics. optionally a web browser and notes.
All of the competition has missed either one or more of the features, making them feel like only a cash grab trying to avoid Valve's cut for providing these features.
I was at EA during peak Origin mania and the defining regret of my career is not having slapped sense into the appropriate people when I had the opportunity to do so.
We really did have a far better shot at it than even most insiders appreciated (to the point rival companies would tell me to my face how confused they were by the apparent failure to execute), however, the core team were more interested in fighting over who would take credit for it when it succeeded than ever ensuring that it would.
Always thought the hate against EA Origin was unwarranted. They 24 hour no questions ask refund policy back in ~2010 that took steam like 5 years to implement themselves.
Outside of being forced to use a game launcher to launch their games, what was the real crime? Not enabling gambling on their platform like steam?
I bought Battlefield 2 and it's DLC and one of the earlier Dirt games on EA Origin and it was an absolute nightmare. My games and the DLC would constantly not be authed in my account and I still have like dozens of support threads in my old mailbox trying to get things working.
At the same time Steam had polished a lot of the rough edges like this for their catalog and other publishers so there's really no excuse. I've never had to open support tickets with any other storefront because the DLC map pack for a game would stop loading while the base game kept working.
Yes but EA Origin was still very consumer friendly at that time. They were one of the only people offering digital refunds at the time. Being able to refund a game on origin then buying a different one on steam was definitely a peak in consumer gaming (that plus the humble bundle being good added to the feeling).
Everyone that needs to respond to shareholders has tried already, and failed against a privately-owned company.
Gabe Newell is a billionaire and has shown no particular need to enshittify his brand just to extract more profit. May he blessed with health and a long life.
It's a noble quest. And realistic; it's almost beyond reason how bad EGS is/was for so long with so much money and "the best people" thrown at it for a decade+.
I've been involved enough with a few (mobile and PC) efforts in this direction, and now believe the US business culture can't create new ones in established markets.
The reason is the highly successful competitor, in that case Steam, inspires a sort of megalomania in those aiming to compete with them, which leads to spectacular self destruction and consumer confusion as stores try to act big long before they are self sustaining.
Also really makes me question your average USA based developer. Making a program and storefront to manage few dozen to few hundred applications can not be that complicated problem. I am not here even talking about scale of Steam libraries that outlier customers have.
There must be some fundamental problem with either developers or management system or both...
my completely uninformed speculation is that they didn't want to just build a clean, simple store that got out of your way, they wanted to throw in some sort of rent extraction or user control at every step.
> Tim Sweeneys quixotic quest to re-create the Steam store
Building a marketplace or AppStore isn't quixotic - it helps build distribution and gives Epic the power needed to drive studios to the Unreal Engine, though this strategy clearly went to the backburner due to Fortnite and it's entire ecosystem becoming the golden goose.
That said, Epic is also significantly more overstaffed than it's peers.
With the downturn in Fortnite (and with it the dream of Fortnite as a platform), and apparent failure of Meta Horizon (at least on the Quest) . . . does that mean the entire concept of a 3D metaverse type UI is dead for another generation?
500M in savings seems like huge amount. Just how unstable is their income? And just what else have they been burning money on to look at that sort of cost saving goal.
> 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.
Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
It's sad that a company being honest about a difficult decision is praiseworthy these days, but here we are.
> Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
I agree, though it might also be worth pointing out that for a game company there's some risk in that messaging that doesn't exist for a normal SaaS company. Investors might like to hear it (whether it is the truth or not), but the game-playing audience tends to be only slightly less anti-generative-AI than say the art community.
The CEO is worth 7B+. 1000 employees at 100k/yr would cost him 100M - less than his net worth fluctuates on any given day and only 20% of other costs savings they have identified.
Executives care little about the stakeholders: the employees, the customers, the community. It's their company, too. They only care about investors and themselves. People who "own" pay a lower tax rate than those that "work". Let's fix that and make things great again.
I think you should reconsider the cost there. $100k/yr is likely well under the average for the people they're letting go. In addition, pretax salary represents only a portion, say 2/3 or so very roughly of what it costs a company to have an employee. Benefits packages and payroll taxes can cost a huge amount too.
This is 25% of their workforce; this isn't some sort of greed thing it's a serious cut to the companies operational ability due to the downturn of their product line.
Maybe he could destroy his wealth to keep the employees around a bit longer but it's better for everyone if they move on and the company has a legitimate opportunity to survive. Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
a product line that is still expected to make $6B this year plus a bunch of other massive IPs. Come on, if he can't keep the team together with that budget then he should step aside and let someone in charge who can.
>Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
Funny. Those companies don't seem to be hiring. Everyone is doing layoffs. Maybe you said that wrong? People running companies don't feel obligated to employ, therefore everyone is now Someone Else's Problem.
As far as I can tell job postings in software are up this year. Executives love expanding, it's the most exciting part of the job. While there are many sectors inside software which may be doing better/worse, I can say my company is hiring, and I have no trouble getting interviews elsewhere if I want them.
It's a very straight forward letter without all of the usual fluff, which I appreciate. Bit it's concerning how much Epic still seems to be hanging their hat on Fortnite. Trends come and go and it seems unlikely to me that Fortnite will grow significantly in the future. It had its moment, they should be focusing on the next big thing.
Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
I am not Tim Sweeney's biggest fan. I know he and his company have many detractors. Please read this comment with that in mind, because while I don't love them, I also think that as layoff announcements go, this is good. No beating around the bush, explicitly NOT blaming AI, taking responsibility, taking care of those impacted. If you are gonna do it, this is as good as it can get.
I think the reality is that Epic got big because of Fortnite but nothing lasts forever. They would have been better off building a war chest and pulling a Valve (though I'm sure they'd hate hearing it that way): going silent and making whatever they wanted for a while, and then trying to repeat the cycle, rebuilding the chest, and then going on. Video games are the exact opposite of Infinite Growth Forever. People get bored and move on.
Meanwhile, Epic has many stable and valuable businesses - Unreal, the game store, etc. - which are perfectly capable of sustaining a sizable company. Just not one as sizable as Epic is. The best case for them is they figure that out, and manage to make a sustainable go of it doing that.
As far as layoff packages go, this is pretty good. 6 months health insurance and at least 4 months pay. The last 2 layoffs I experienced were just 1 week pay for every year you worked there and zero extended health benefits. And they made sure to note that they didn’t have to pay out anything at all, legally.
The wording of the announcement is better than the usual corporate non-speak too.
> they didn’t have to pay out anything at all, legally.
And still the overwhelming sentiment on HN is that unions are worthless.. When my company had layoffs the laws (thanks to the unions) made it favorable to us without needing the goodwill of the company. Additionally, representatives from the union were involved in all steps and made sure everything went as it should.
Were unions involved in Epic's layoff?
I’ve wondered how much money was burned on Tim Sweeneys quixotic quest to re-create the Steam store. I know a lot of people who would religiously download the “free games” but never spent a cent.
The Epic Games store/browser is awful. I have bought one (insanely discounted) game on it and get all the free games, because i like to collect videogames. But i almost never play them, because the application is super slow. Steam has absolutely the best application, then (with a huge enormous gap) comes Gog, Amazon, Xbox, EA, Ubisoft and Epic at the rock bottom. I don't use Blizzards program, so i can't judge on that one.
> i like to collect videogames
Starting thinking of it as collection licenses to maybe install games, assuming the license is still valid when you finally get around to playing it. And your account is still valid. And the servers are still running. And your operating system will still run it. etc.
Maybe just get off the train. Your numbers add to the awful business model these games are built on.
In fairness, someone has to try. We can't rely on GabeN being (relatively) benign without serious competition.
I think the following is the bare minimum to compete with Steam at this point: 1. Store with discoverability, 2. A functional cart feature at launch 3. A wishlist with notifications for discount 4. Relatively high download speeds (500Mbps at least) 5. Friends list and activity feed 6. Achievements 7. An equivalent to steam input API 8. Regional pricing with robust payment options 9. Development/Beta build distribution as easy as steam. 10. A useful in-game overlay with at least performance metrics. optionally a web browser and notes.
All of the competition has missed either one or more of the features, making them feel like only a cash grab trying to avoid Valve's cut for providing these features.
Everyone has tried already. EA, Ubisoft, Blizzard, Epic...
I was at EA during peak Origin mania and the defining regret of my career is not having slapped sense into the appropriate people when I had the opportunity to do so.
We really did have a far better shot at it than even most insiders appreciated (to the point rival companies would tell me to my face how confused they were by the apparent failure to execute), however, the core team were more interested in fighting over who would take credit for it when it succeeded than ever ensuring that it would.
Always thought the hate against EA Origin was unwarranted. They 24 hour no questions ask refund policy back in ~2010 that took steam like 5 years to implement themselves.
Outside of being forced to use a game launcher to launch their games, what was the real crime? Not enabling gambling on their platform like steam?
I bought Battlefield 2 and it's DLC and one of the earlier Dirt games on EA Origin and it was an absolute nightmare. My games and the DLC would constantly not be authed in my account and I still have like dozens of support threads in my old mailbox trying to get things working.
At the same time Steam had polished a lot of the rough edges like this for their catalog and other publishers so there's really no excuse. I've never had to open support tickets with any other storefront because the DLC map pack for a game would stop loading while the base game kept working.
The main problem with EA Origin was EA itself. They have burnt every single bit of costumer trust EA as a company could have.
Yes but EA Origin was still very consumer friendly at that time. They were one of the only people offering digital refunds at the time. Being able to refund a game on origin then buying a different one on steam was definitely a peak in consumer gaming (that plus the humble bundle being good added to the feeling).
Everyone that needs to respond to shareholders has tried already, and failed against a privately-owned company.
Gabe Newell is a billionaire and has shown no particular need to enshittify his brand just to extract more profit. May he blessed with health and a long life.
It's a noble quest. And realistic; it's almost beyond reason how bad EGS is/was for so long with so much money and "the best people" thrown at it for a decade+.
Anway, it's not quixotic IMHO.
I've been involved enough with a few (mobile and PC) efforts in this direction, and now believe the US business culture can't create new ones in established markets.
The reason is the highly successful competitor, in that case Steam, inspires a sort of megalomania in those aiming to compete with them, which leads to spectacular self destruction and consumer confusion as stores try to act big long before they are self sustaining.
Also really makes me question your average USA based developer. Making a program and storefront to manage few dozen to few hundred applications can not be that complicated problem. I am not here even talking about scale of Steam libraries that outlier customers have.
There must be some fundamental problem with either developers or management system or both...
my completely uninformed speculation is that they didn't want to just build a clean, simple store that got out of your way, they wanted to throw in some sort of rent extraction or user control at every step.
Right, to apparently every MBA wielding PM they are actually primarily user ID systems which allow you to buy things (including whole games).
And doing this requires including a near complete web browser with piles of added hooks, obviously.
> religiously download the “free games” but never spent a cent.
We are Legion.
> Tim Sweeneys quixotic quest to re-create the Steam store
Building a marketplace or AppStore isn't quixotic - it helps build distribution and gives Epic the power needed to drive studios to the Unreal Engine, though this strategy clearly went to the backburner due to Fortnite and it's entire ecosystem becoming the golden goose.
That said, Epic is also significantly more overstaffed than it's peers.
My main issue with Epic' Store is that it doesn't have a rating/review system just like Steam has.
Since game journos are completely woke and unreliable using Steam's game ratings from REAL players is a God-send.
Without it you simply wouldn't know if a game is any good or not.
1000 layoffs represents around 25% of Epic's total workforce.
Ouch, that is huge. I assumed this was more like 10%
With the downturn in Fortnite (and with it the dream of Fortnite as a platform), and apparent failure of Meta Horizon (at least on the Quest) . . . does that mean the entire concept of a 3D metaverse type UI is dead for another generation?
VRChat seems like it's doing perfectly fine. It's more like this concept is more niche than anyone seems willing to admit.
Roblox
Roblox is a product for the Toys R Us crowd. You don't project from products that work for them on to what sells to teens and adults.
Technically, you need to include the adult predators as recurring revenue too.
Roblox is the elephant in the room here which fills the niche for freemium, fun 3D experiences that run on basically any platform or device.
500M in savings seems like huge amount. Just how unstable is their income? And just what else have they been burning money on to look at that sort of cost saving goal.
If you are a billion dollar company, 500m are in the lower range
> 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.
Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
It's sad that a company being honest about a difficult decision is praiseworthy these days, but here we are.
> Layoffs really, really suck, but at least there's not a whiff of the "we're doubling down on AI to boost productivity" cop out that we're seeing across the industry.
I agree, though it might also be worth pointing out that for a game company there's some risk in that messaging that doesn't exist for a normal SaaS company. Investors might like to hear it (whether it is the truth or not), but the game-playing audience tends to be only slightly less anti-generative-AI than say the art community.
> it might also be worth pointing out that for a game company there's some risk in that messaging
This.
The CEO is worth 7B+. 1000 employees at 100k/yr would cost him 100M - less than his net worth fluctuates on any given day and only 20% of other costs savings they have identified.
Executives care little about the stakeholders: the employees, the customers, the community. It's their company, too. They only care about investors and themselves. People who "own" pay a lower tax rate than those that "work". Let's fix that and make things great again.
I think you should reconsider the cost there. $100k/yr is likely well under the average for the people they're letting go. In addition, pretax salary represents only a portion, say 2/3 or so very roughly of what it costs a company to have an employee. Benefits packages and payroll taxes can cost a huge amount too.
This is 25% of their workforce; this isn't some sort of greed thing it's a serious cut to the companies operational ability due to the downturn of their product line.
Maybe he could destroy his wealth to keep the employees around a bit longer but it's better for everyone if they move on and the company has a legitimate opportunity to survive. Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
> downturn of their product line
a product line that is still expected to make $6B this year plus a bunch of other massive IPs. Come on, if he can't keep the team together with that budget then he should step aside and let someone in charge who can.
>Besides people don't want to be on corporate welfare anyways, they'd rather be part of a company where they can add meaningful value.
Funny. Those companies don't seem to be hiring. Everyone is doing layoffs. Maybe you said that wrong? People running companies don't feel obligated to employ, therefore everyone is now Someone Else's Problem.
As far as I can tell job postings in software are up this year. Executives love expanding, it's the most exciting part of the job. While there are many sectors inside software which may be doing better/worse, I can say my company is hiring, and I have no trouble getting interviews elsewhere if I want them.
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
Why would the CEO waste his wealth on reviving unnecessary jobs?
Why wouldn't he? Why isn't he invested in the stakeholders?
Isn't he responsible for this downturn?
Why keep the goose that lays the golden eggs alive when you can kill it and get all the golden eggs today?
[dead]
It's a very straight forward letter without all of the usual fluff, which I appreciate. Bit it's concerning how much Epic still seems to be hanging their hat on Fortnite. Trends come and go and it seems unlikely to me that Fortnite will grow significantly in the future. It had its moment, they should be focusing on the next big thing.
I hate that Tim got lucky two times with initiatives of employees that went against his will. I hope epic falters.
More info on this? What are you referring to?
[flagged]
Take it to Reddit.