Fortnite maker Epic Games to lay off nearly 900 employees

Epic Games, the developer of the popular battle royale game 'Fortnite'has announced it will be laying off about 900 employees or 16 per cent of its workforce as the gaming industry goes through a downturn.

Epic Games CEO Tim Sweeney in a memo to the employees on Thursday (Sep 28)said it was 'unrealistic' for the company to move forward without downsizing.

“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney wrote.

“I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”

Sweeney mentioned that the company was cutting costs but without breaking development or the core lines of businesses. He added about two-thirds of the layoffs were in teams that are outside of core development.

The terminatedemployees will be offered a severance package that includessix months base pay and in the US/Canada/Brazil six months of Epic-paid healthcare.

"We’re offering to accelerate people’s stock option vesting schedule through the end of 2024 and are giving two additional years from today to exercise the options. In the US we’re also offering to vest any unearned profit sharing from their 401k."

What else apart from downsizing?

The company is now expected to focus its resources on shipping its must-succeed initiatives: thenext Fortnite season and Fortnite Chapter 5, Del Mar, Sparks, and Juno.

Apart from the downsizing, the company is also divesting Bandcamp - an online audio platform it acquired last year. Additionally, the company will be spinning off most of SuperAwesome, a kid-safe technology developer that it acquired in 2020.

"Bandcamp is joining Songtradr, a music marketplace company supporting artists. SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand, led by their current CEO Kate O’Loughlin. Kids Web Services (KWS), the parent verification and consent management toolset, will remain part of Epic."

The layoffs come at a time when Epic has been involved in a legal battle with Apple since 2020. The gaming firm alleges thatApple's practice of charging up to 30 per cent commissions on in-app payments on iPhones and other devices violates US antitrust rules.

(With inputs from agencies)

WATCH WION LIVE HERE: