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28.09.2023 - 15:43 / techcrunch.com / Tim Sweeney / Of Its
Epic Games is laying off 16% percent of its employees, impacting about 870 people, the Fortnite maker announced on Thursday. The company also announced that it’s divesting Bandcamp, an online audio distribution platform it acquired last year, and spinning off most of SuperAwesome, a kid-safe technology developer that it acquired in 2020. The layoffs news was first reported by Bloomberg.
“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,” Epic Games CEO Tim Sweeney wrote in a memo to employees. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Sweeney went on to note that the company had been making ongoing efforts to reduce costs, including moving to net zero hiring and cutting operating spend on things like marketing and events. Despite these efforts, the company ended up “far short of financial sustainability” and that Epic concluded that layoffs were the next logical step. Sweeney says that conducting the layoffs now and on this scale will stabilize the company’s finances.
As for Bandcamp and SuperAwesome, Bandcamp is joining Songtradr, a music marketplace company, while SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand, led by their current CEO Kate O’Loughlin.
“We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans,” Sweeney wrote. “About two-thirds of the layoffs were in teams outside of core development. Some of our products and initiatives will land on schedule, and some may not ship when planned because they are under-resourced for the time being. We’re ok with the schedule tradeoff 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.”
The news comes as Epic Games announced today that Fortnite V-Bucks will increase in price in the United States and several other countries on October 27. In a blog post, the company explained that the price increase of around 12% to 15% per bundle is due to “economic factors such as inflation and currency fluctuations.”
The layoffs also come as Epic Games filed a cert petition with the Supreme Court on Wednesday, setting things in motion for the highest court in the land to reexamine if Apple’s software business violates federal antitrust laws. If the Supreme Court select the case, it would reopen a protracted legal battle between the two companies that’s wended its way through the courts for going on five years now.
This story is developing…
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Fortnite developer Epic Games is set to lay off 870 employees as it seeks to lower costs, a Bloomberg report reveals. In a memo sent to workers earlier today, chief executive officer Tim Sweeney said the company had been spending a lot more money than it was earning for quite some time. He said: «I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see this was unrealistic.»
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Epic Games has announced that it is laying off around 830 employees – around 16% of the company’s total workforce – and splitting off recent acquisitions, with Epic CEO Tim Sweeney admitting that they have been “spending way more money than we earn.”
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