Epic Games, the video game manufacturer Fortnite, announced this Thursday that it has fired about 830 workers, 16% of the workforce, due to a crisis generated by the drop in popularity of its main title, which is played by about 30 million people a day, on average. Tim Sweeney, the company’s CEO, announced the move in a statement to employees. “For a long time I was optimistic that we could get through this transition without letting anyone go, but looking back I think that was unrealistic,” he said. The manager has reported that the company is getting rid of Bandcamp, an online community focused on music. The company is getting rid of this asset just a year and a half after having bought it in an operation designed to expand beyond games.
Epic had been trying to avoid cuts for months. The North Carolina-based company had ordered a freeze on all hiring in its 40 offices around the world, which totaled 2,300 people as of today. He had also reduced the budget for events and marketing spending to a minimum. This was not enough to achieve “financial sustainability.” The board of directors determined that cuts were the only way to stabilize the numbers.
Of the total number of people laid off, about 250 worked for Bandcamp and SuperAwesome, a parental control and advertising platform that Epic acquired in 2020. Bandcamp, who boasts of giving 80% of income to artists and record labels, a figure much more superior to other music communities, will become part of Songtrader, a company based in Santa Monica, California.
Epic’s chief executive has made clear that the cuts do not hurt the video game maker’s core business. Two-thirds of employees leaving Epic were not involved in programming or development tasks. Fortnite It is by far the company’s greatest success. It has about 230 million monthly players, although the number of users has fallen by 4% in recent months.
The Chinese technology giant Tencent owns 40% of Epic, which in 2022 obtained a valuation of $32 billion. As happened with several companies in the entertainment sector, the staff at Epic, manufacturer of From sea, Sparks and Juno It grew during the years of the pandemic to almost 5,500 workers. The cuts do not affect upcoming announced releases, including collaborations with Lego.
Sweeney has explained that those affected by the cuts will leave the company with six months’ salary and medical insurance. Former employees will also be able to exercise, starting in 2024 and until mid-2025, their share packages. “Epic’s future is prosperous,” said the CEO, who has ruled out more layoffs in the immediate future.
Fortnite is an online battle game that allows you to connect with users from all over the world and build communities. The battle royal model, where a single user wins the game by eliminating the others, became such a success that it led the company to expand to a metaverse. This one focused on content creators. Epic made adjustments to allow greater weight for content created by users, who broadcast hours of games on Twitch, increasing income from the sale of accessories and objects to customize avatars. Sweeney has considered this “creator ecosystem” a success and a great achievement, but recognizes that it left structural changes to the company’s finances. That impact has been strongly felt today.
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