The video game company Epic Games is laying off more than 1,000 employees, it said on Tuesday, citing a drop in the amount of time people are spending playing Fortnite.
“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,” Tim Sweeney, the company’s chief executive, wrote in a blog post. “This layoff, together with over $500 million of identified cost savings in contracting, marketing and closing some open roles puts us in a more stable place.”
The cut represents about 20 percent of the work force at Epic Games, a company spokeswoman said.
It was the second time in recent years that the company, which is based in North Carolina, had announced major job cuts. In 2023, Epic Games laid off 830 employees, or about 16 percent of its work force, citing lower profit margins for Fortnite. “I’m sorry we’re here again,” Mr. Sweeney wrote in his blog post.
Some of the challenges Epic Games is facing are problems for the wider video game industry, Mr. Sweeney wrote: Slower growth, weaker spending, a drop in sales of new video game consoles compared to the previous generation of consoles, and games “competing for time against other increasingly engaging forms of entertainment.”
Some of the problems Epic faces are unique and related to Fortnite, the popular multiplayer shooting game released in 2017 that includes spinoffs like Lego Fortnite, Rocket Racing and Fortnite Festival.
“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we’re only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones,” Mr. Sweeney wrote.
Last year, Apple restored Fortnite to the App Store in the United States, nearly five years after Apple and Google kicked it out of their app stores and Epic Games sued both companies in an antitrust case. Epic Games announced just days ago that Fortnite was back on Google Play.
While Fortnite is free to download, Epic Games said earlier this month that it was raising the price of V-Bucks, the in-game currency players can use to buy outfits, known as skins, and other accouterments. “The cost of running Fortnite has gone up a lot and we’re raising prices to help pay the bills,” Epic said in announcing the price increase.
Despite its problems, Fortnite remains a popular game.
It led the United States in February among monthly active users of both PlayStation and Xbox, Mat Piscatella, a video game industry analyst at Circana, a market research firm, wrote in a post on social media, citing Circana’s tracking data.
But there was a drop in engagement, the data showed. The average PlayStation user played Fortnite for 16 hours last month, down from 21 hours in February 2025, Mr. Piscatella wrote. Xbox users averaged 15 hours of Forntnite in February, down from 19 hours in February 2025.
Joost van Dreunen, a market analyst and professor at New York University, said that Forntite must compete for attention not only with other popular games like Roblox but also with social media companies like TikTok and short-form videos on YouTube and other platforms.
Its problems, he said, are part of a broader shift in the industry, which is growing more in China than it is in the United States.
“We’re witnessing in real-time the decline of American cultural dominance in gaming,” Mr. van Dreunen said. “One of these landmarks like Fortnite is starting to feel the burn as the consumer entertainment industry is slowly moving from West to East in its financial gravity point.”
Mr. Sweeney wrote that the workers who were laid off would receive a severance package that includes at least four months of base pay, with more based on tenure. Epic Games will also extend health care coverage for six months to U.S.-based employees who have been laid off, Mr. Sweeney wrote.
Michael Levenson covers breaking news for The Times from New York.
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