‘Fortnite’ Maker Epic Games Reveals Mass Layoffs, Says AI Isn’t to Blame

Epic Video games introduced on Tuesday that it’ll lay off greater than 1,000 staff, and CEO Tim Sweeney addressed the technological elephant within the room: synthetic intelligence.

“Because it’s a factor now, I ought to word that the layoffs aren’t associated to AI,” Sweeney wrote in a memo to workers that was additionally posted publicly. “To the extent it improves productiveness, we wish to have as many superior builders growing nice content material and tech as we will.”

Launched in 2017, the favored battle royale shooter, Fortnite, reportedly had over 650 million registered gamers worldwide in 2025. Within the memo, nevertheless, Sweeney mentioned a decline in Fortnite engagement that started in 2025 left Epic spending “considerably greater than we’re making,” forcing the corporate to make main cuts to maintain the enterprise afloat.

Whereas Sweeney didn’t elaborate on the explanation for mentioning AI, one motive could lie within the firm’s embrace of the expertise. In 2023, Epic Video games discovered itself at odds with Valve, the creator of Steam, over using generative AI in video games, with the Fortnite maker permitting video games developed utilizing the expertise on its Epic Video games Retailer market.



The layoffs, the corporate mentioned, are a part of a broader cost-cutting effort, with over $500 million moreover saved by decreasing contracting, slicing advertising and marketing spending, and leaving some roles unfilled. Sweeney in contrast the second to earlier moments within the firm’s historical past, together with its shift from 2D to 3D video games within the Nineteen Nineties and later transfer into on-line titles reminiscent of Fortnite.

“Market situations immediately are essentially the most excessive we have seen since these early days, with large upheaval within the business accompanied by large alternative for the businesses that come out as winners on the opposite aspect,” Sweeney wrote. “That is what we’re aiming to do for our gamers, and we goal to deliver different like-minded builders within the business alongside on the journey to construct an more and more open and vibrant way forward for leisure collectively.”

Sweeney additionally famous the present console era is promoting fewer items than its predecessor, and that video games more and more compete with different digital leisure for gamers’ time.

Because the public launch of ChatGPT and Midjourney in 2022, the gaming business has grappled with the choice of whether or not or to not incorporate generative AI in sport growth. Some creators had antagonistic takes: In December, former Grand Theft Auto developer Dan Houser in contrast the expertise to “mad cow illness.”

Regardless of public pushback towards using AI in gaming, a report revealed by Google Cloud final 12 months mentioned 9 in 10 sport builders mentioned they had been already utilizing AI brokers of their work. Main sport publishers like Digital Arts, Sq. Enix, and Krafton have publicly embraced AI in recent times as business layoffs have swelled.

Some challenges, Sweeney famous, nevertheless, are particular to Epic Video games.

“Regardless of Fortnite remaining one of the profitable video games on the earth, we’ve had challenges delivering constant Fortnite magic with each season; we’re solely within the early phases of returning to cellular and optimizing Fortnite for the world’s billions of smartphones,” he wrote.

Affected staff, Epic mentioned, will obtain a minimum of 4 months of base pay, six months of company-paid healthcare for U.S. staff, and accelerated stock-option vesting by January 2027.

Regardless of the layoffs, Epic plans to proceed investing in its expertise, with Sweeney noting that the corporate is making ready to transition from Unreal Engine 5 and Unreal Editor for Fortnite towards Unreal Engine 6 as a part of its subsequent section. Unreal Engine is used broadly throughout not solely the gaming business, but additionally in leisure tasks of all types.

“In being the business’s vanguard now we have taken a number of bullets in a battle which is simply within the early days of paying off for ourselves and all builders,” Sweeney mentioned.

Epic Video games didn’t instantly reply to Decrypt’s request for remark.