Epic Games Cuts Over 1,000 Jobs, Citing Fortnite Engagement Decline

Epic Games laid off over 1,000 employees on March 24, 2026, and the number that explains everything is not the headcount but the hours: the average U.S. Fortnite player engaged with the game for just 16 hours during February on PlayStation and 15 hours on Xbox, down from 21 hours and 19 hours, respectively, during the same period a year ago. For a studio whose entire financial architecture rests on keeping players inside its free-to-play ecosystem, that drop was existential.

"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," CEO Tim Sweeney wrote in a memo sent to staff Tuesday. The layoffs, combined with over $500 million in identified cost savings across contracting, marketing, and closing open roles, are intended to put Epic in a more stable position.

The cuts represent roughly 20% of Epic's workforce, leaving the company with approximately 4,000 employees. At the Cary, North Carolina headquarters where Epic has been based since 1999, the company told state officials it would permanently lay off at least 211 workers, including artists, engineers, programmers, and designers. The single hardest-hit job title in Cary was senior tester, with 37 positions eliminated from that role alone.

Sweeney was explicit that the layoffs are not related to AI. Instead, he pointed to conditions battering the broader industry: slower growth, weaker spending, tougher cost economics, current consoles selling less than the last generation's, and games competing for time against other increasingly engaging forms of entertainment. While Fortnite's engagement and playerbase were dropping, its competition saw surges, with Roblox reaching its peak playerbase numbers in 2025.

The financial pressure had been building visibly. Epic had raised prices of Fortnite's in-game currency earlier this month, citing higher costs to run the game. Sweeney acknowledged in 2025 that the company's antitrust lawsuit against Apple cost Epic more than $1 billion. A $31.5 billion valuation from a 2022 Sony and Lego parent investment, and a $1.5 billion Disney equity stake in early 2024, could not insulate the studio from a game whose players are simply spending less time in it.

"It is very painful to part with so many talented people," Sweeney wrote, adding that laid-off employees would receive severance packages including at least four months of base pay, as well as extended health insurance and other benefits. Epic will pay for healthcare coverage for six months for affected U.S. workers, and will accelerate the vesting of stock options through next January while extending equity exercise options for up to two years.

The move marks Epic's second major round of layoffs in three years. In September 2023, the company cut about 830 jobs, roughly 16 percent of its workforce, to boost profitability. Those earlier cuts were partly tied to costly investments in Sweeney's metaverse ambitions for Fortnite.

A class action law firm, Strauss Borrelli PLLC, has already opened an investigation into whether Epic violated the federal WARN Act with the Cary cuts, which requires covered employers to give at least 60 days' written notice before a mass layoff takes effect. The firm says that if the notice was insufficient, the 211 affected Cary employees may be entitled to 60 days of severance pay and benefits.

Sweeney laid out a path forward: build new Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools as Epic transitions from Unreal Engine 5 to Unreal Engine 6; and kick off what he described as the next generation of Epic with "huge launch plans towards the end of the year." Epic and Disney, whose $1.5 billion partnership was announced in 2024, remain committed to building their interoperable games and entertainment universe featuring IP from Marvel, Star Wars, Pixar, and Avatar. Whether rebuilding Fortnite's hour-count is a content problem or a structural one is the question now sitting in front of roughly 4,000 remaining employees.