Epic Games, the makers behind Fortnite, is confirmed to be laying off 1,000 employees, according to a company memo from its CEO shared publicly.

The video games company cited a downturn in engagement on Fortnite that began in 2025, meaning the firm is “spending significantly more than we’re making, and we have to make major cuts to keep the company funded,” CEO Tim Sweeney wrote in the memo shared on Tuesday.

“This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place,” he said.

This is just the latest move from Epic Games on its cost-cutting journey – the firm upped the price of its in-game Fortnite currency, V-Bucks, citing that operating costs for the game have increased.

Unlike many other major tech companies announcing layoffs, Sweeney did not cite AI as a reason for the job cuts, instead listing a host of overarching economic pressures like deepening costs, lower sales, and stiffer competition.

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Still, Fortnite appears to be facing its own unique struggles as well.

“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season,” Sweeney noted. “We’re only in the early stages of returning to mobile and optimising Fortnite for the world’s billions of smartphones; and in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.”

Employees impacted by this latest round of cuts will receive severage packages with at least four months of back pay, with extensions based on tenure.

“What we now need to do is clear: build awesome Fortnite experiences with fresh seasonal content, gameplay, story, and live events; accelerate developer tools with greater stability and capability as we evolve from Unreal Engine 5 and UEFN to Unreal Engine 6,” Sweeney said in his memo. “And we’ll be kicking off the next generation of Epic with huge launch plans towards the end of the year.”