Epic Games, the creator of the hugely popular video game Fortnite, announced Thursday, September 28, the layoff of 16% of its payroll, or approximately 830 people, according to a copy of an email sent to staff by CEO Tim Sweeney.
This social plan aims to make savings to stabilize the group’s finances, even if it means experiencing delays in development. “Some of our products and initiatives will be delivered on schedule, while others will not because they are currently under-resourced,” Sweeney warned.
“For some time now, we’ve been spending far more money than we make, investing in Epic’s next release and growing Fortnite as a metaverse-inspired ecosystem for creators,” explained the director general to employees. “I have long been optimistic that we could move forward without layoffs, but in retrospect I realize that was not realistic. »
Fortnite’s growth has resumed, but it is driven by creator content, which means significant revenue sharing for the company, according to Mr. Sweeney, who founded the company in the 1990s. “creator ecosystem is a great success, but it means a major structural change to our business model,” he continued.
Epic Games also decided to sell Bandcamp, the online music store it acquired early last year, and spin off another unit’s advertising business, according to the email.
An announcement against the backdrop of a legal battle with Apple and Google
This announcement comes in a context which sees the publisher continue to spend funds on its legal battle against Apple and Google. Although the company has taken steps to reduce its legal costs, it “continues to fight against the distribution monopolies and taxes of Apple and Google,” said Tim Sweeney.
Epic Games has been fighting Apple and Google in US courts for years over the rules and fees imposed by their respective app stores, which allow consumers to download video games like Fortnite to their smartphones and tablets.