Epic Games, Inc., the developer of the global game "Fortnite," has begun a large-scale workforce reduction of more than 1,000 people, citing a decline in users and worsening profitability.
On the 24th (local time), CEO Tim Sweeney said in an internal memo that "due to a decline in Fortnite user engagement, expenditure is far greater than revenue," and added that "restructuring is inevitable to keep the company going."
Epic Games, Inc. said that along with the layoffs, it expects to achieve $500 million in expense reductions through measures such as cutting back on outsourcing, reducing marketing expenses, and eliminating unfilled positions.
Sweeney also cited the deterioration of the overall environment in the game industry as a backdrop. He said that although Fortnite remains a global hit, intensified competition, slowing consumption, and weakness in the console market are overlapping, making it difficult to sustain performance.
This restructuring is the second in three years. The company also carried out layoffs of about 1,000 people in Sep. 2023.
Epic Games, Inc. presented a renewed push into the mobile market as its strategy to restore profitability. Fortnite was removed from Google Play in 2020 amid a dispute over Apple's and Google's app payment policies, but it was re-listed on the 19th following recent policy changes.
The company plans to secure additional growth potential by optimizing for the mobile environment and improving features. It is also enhancing mobile-specific functions such as friend invites and portrait mode.
Meanwhile, Sweeney drew a line, saying the layoffs are unrelated to the adoption of generative artificial intelligence (AI), and emphasized that "securing excellent development talent remains important."