Epic Games lays off another 1,000 staff
Epic Games has laid off over 1,000 employees: its second major round of layoffs in three years.
The news was announced yesterday by CEO Tim Sweeney in an email to Epic employees, later posted on the company website.
Epic attributes the job cuts to declining revenues from Fortnite, and to industry-wide changes in the games market.
Below, we summarize yesterday’s news and assess what it means for CG artists using Epic Games’ tools, including Unreal Engine, Twinmotion, RealityScan and Quixel Megascans.
An even wider round of job cuts than in 2023
The job cuts are Epic’s second major round of layoffs in three years: in September 2023, the company laid off 830 staff, then 16% of its workforce.
This week’s cuts are even deeper, with over 1,000 employees losing their jobs.
As with the previous layoffs, one of the key reasons is revenue from Fortnite, Epic’s biggest single revenue stream – or the lack thereof.
According to Sweeney, “the downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making”.
Sweeney’s email also references Epic’s recently resolved legal disputes with Apple and Google, which led to Fortnite being absent from the App Store and Google Play Store for five years.
“We’re only in the early stages of returning to mobile,” he wrote. “In being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.”
Layoffs also attributed to ‘industry-wide challenges’, but not to AI
Sweeney also cited “industry-wide challenges”, including lower sales for current-gen consoles than the previous generation, and increasing competition with other forms of entertainment.
According to Sweeney, those challenges did not include the rise of AI.
“The layoffs aren’t related to AI. To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”
So how will this affect development of Epic Games’ software?
In the previous round of layoffs, Epic focused on non-developer jobs, with two thirds of the cuts coming from outside the development teams.
Sweeney’s latest email hints at a similar approach, citing an additional $500 million of savings in contracting and marketing on top of the staff layoffs.
He also describes Epic’s intention to “accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6”.
However, it doesn’t include the detailed guarantees that we saw last time around that Epic would continue to invest in the other CG software it owns, which includes real-time visualization tool Twinmotion, the RealityScan family of 3D scanning tools, and Quixel’s Megascans library.
Last time around, Tim Sweeny commented: “This is going to affect everything we do, and it’s going to result in a degradation of the quality of some of the work, and I’m sorry for that.”
With today’s even wider-ranging cuts, its hard to see that the same will not hold true.
Read Tim Sweeney’s email to Epic Games employees about the latest job cuts
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