Epic Games Cuts 16% of the Workforce and Sells Bandcamp Amid Financial Challenges
Epic Games, the creator of the highly successful video game Fortnite, is undertaking significant measures to address financial challenges. The company is reducing its workforce by cutting 870 jobs, which accounts for approximately 16% of its employees. Alongside this, Epic Games is selling Bandcamp, an online music platform it acquired just last year.
In a memo addressed to its staff, Epic Games revealed its efforts to control costs but acknowledged that it continued to “spend way more money than we earn.” CEO Tim Sweeney expressed the necessity of layoffs to stabilise the company’s finances. Sweeney noted that Epic had previously made attempts to reduce costs, such as implementing a net-zero hiring policy and reducing operational expenses, including marketing and events. Despite these efforts, the company struggled to achieve financial sustainability.
The acquisition of Bandcamp in 2022 raised questions about how it would integrate with Epic Games. Bandcamp is renowned as a platform that empowers independent artists to receive better returns for their music compared to streaming services. The decision to sell Bandcamp to Songtradr, a music marketplace company supporting artists, suggests that the synergy between the two businesses may not have been as successful as initially hoped.
While the specifics of where the job cuts will occur, including locations like the UK where Epic Games has offices, have not been disclosed, Tim Sweeney emphasised that the layoffs would not disrupt core development or the company’s primary business lines. He mentioned that a significant portion of the layoffs would affect teams “outside of core development.”
Epic Games is renowned not only for Fortnite but also for its gaming engine, Unreal Engine, which powers numerous successful titles, including Fortnite and Gears of War. Fortnite boasts immense popularity worldwide, with an estimated 400 million registered users. These measures taken by Epic Games aim to address its financial situation and chart a more sustainable path forward.