Epic Games has announced a restructuring plan that involves reducing its workforce by 16%, divesting the music platform Bandcamp.
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In a memo to employees, CEO Tim Sweeney cited the company’s excessive spending relative to its earnings as the reason for these actions. While Epic Games had previously attempted to trim expenses in areas like marketing and events, Sweeney determined that layoffs were necessary to achieve financial stability.
Approximately two-thirds of the 830 job cuts will not impact core development, ensuring that major projects remain on track. Additionally, Epic will sell Bandcamp to Songtradr, a music licensing platform, while the SuperAwesome advertising business will transition into an independent company under the SuperAwesome brand. This move comes amid a broader trend of job reductions in the tech industry, driven by factors such as slowing growth and higher interest rates. Despite these changes, Epic Games, valued at over $30 billion in 2022 and largely owned by Tencent of China, remains a privately held company.
Epic Games Inc., known for its global blockbuster Fortnite, the Epic Games Store, and the widely acclaimed Unreal Engine, is undergoing a workforce reduction of 16 percent. According to a report initially by Bloomberg’s Jason Schreier, nearly 900 employees will be affected by these job cuts.
This morning, a memorandum was circulated within the North Carolina-based company, as reported by Kotaku, delivering the unfortunate news to its staff. The memo outlined the layoff of 16 percent of the workforce and the decision to sell Bandcamp, along with the restructuring of most of the marketing company SuperAwesome. Earlier today, Schreier mentioned in an article, “Rumors were circulating as Epic disabled Slack for employees in anticipation of the announcement.”
Epic Games Has Massive Layoffs
The decision to lay off 16 percent of its workforce, which amounts to nearly 900 employees, is a significant and surprising move for a company that has been a juggernaut in the gaming industry. Epic Games is renowned not only for creating the cultural phenomenon known as Fortnite but also for the development of the Unreal Engine, a pivotal software platform used by countless game developers worldwide. Additionally, the company has made substantial strides in the digital distribution arena with the Epic Games Store.
The memo that circulated among Epic Games’ staff outlined the company’s rationale behind this massive downsizing. It pointed to the necessity of cost-cutting measures to address a financial imbalance where expenditures have consistently outstripped earnings. Despite efforts to reduce expenses in areas like marketing and events, the company ultimately concluded that staff layoffs were the only viable solution to regain financial stability.
