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The Fortnite maker is also spinning off most of SuperAwesome, the Irish-founded maker of a consent tool to create safe online gaming spaces for children.
In an email to staff yesterday (28 September), Epic Games CEO Tim Sweeney announced that the company is firing 16pc of its workforce – about 830 people.
Sweeney said that Epic had been “spending way more money than we earn” to grow their flagship game Fortnite and build the “next evolution” of the company.
“I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic,” he said in lieu of an apology.
Sweeney said the layoffs have affected people working in business functions “disproportionately” because the company didn’t want to sacrifice product development.
“About two-thirds of the layoffs were in teams outside of core development,” he said.
Epic has offices in a number of countries. It is not yet known where the cuts will most affect. However, Sweeney mentioned a severance package for workers which will include six months of healthcare in the US, Canada and Brazil.
He said that Epic “are continuing to invest in games with Fortnite first-party development, the Fortnite creator ecosystem and economy, Rocket League and Fall Guys; and services for developers including Unreal Engine”.
Sweeney also announced that the company is selling Bandcamp, a music platform that it acquired only last year. Songtradr, a music-licensing platform, is taking it over and yesterday announced that it “will continue to operate Bandcamp as a marketplace and music community with an artist-first revenue share”.
Most of SuperAwesome is also being spun out. Sweeney said its advertising business will become an independent company led by their current CEO Kate O’Loughlin. However, Kids Web Services (KWS), the parent-verification and consent-management toolset, will remain part of Epic.
SuperAwesome, which was acquired by Epic Games in 2020, was founded in 2013 by Irish entrepreneur Dylan Collins with the aim of building tools for developers to create safe online gaming environments for children.
Overall, about 250 more employees will be leaving Epic because of these divestitures.
As a result of the layoffs, some products and initiatives will not be released on schedule. “We’re OK with the schedule trade-off if it means holding on to our ability to achieve our goals, get to the other side of profitability and become a leading metaverse company,” Sweeney said.
Fight against Apple and Google continues
Epic Games has been in a long-running battle with Apple and Google about what it calls their “distribution monopolies and taxes”. Earlier this year, a US appeals court rejected claims by Epic that Apple’s App Store violates antitrust rules.
Epic first sued Apple (and Google) in 2020 after Fortnite was removed from the app stores of both Apple and Google for violating in-app purchase rules.
Epic Games introduced an in-game payment system that would allow users to pay directly for in-app purchases, circumventing the official payment systems put in place by Apple and Google in their app stores. The Fortnite maker did this to get past the 30pc cut these app stores took from every transaction.
Sweeney said yesterday that the company is reducing its legal expenses but is “continuing the fight against Apple and Google … so the metaverse can thrive and bring opportunity to Epic and all other developers”.
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