Epic Games said on Tuesday (Mar 24) it would cut more than 1,000 jobs after a drop in engagement for Fortnite, its flagship title, the latest cuts in the video-game industry whose growth has stalled amid economic uncertainty.
The cuts, along with more than US$500 million in savings from lower contracting and marketing spending and unfilled roles would put the company in “a more stable place,” Chief Executive Tim Sweeney said in a note to employees.
The cuts are the latest in the gaming sector, where companies have faced weaker growth as consumers have been sticking with proven titles amid economic uncertainty.
But even those, especially live services games, which depend on a steady stream of new content to keep players engaged, are now showing signs of cracks.
“We’ve had challenges delivering consistent Fortnite magic,” Sweeney said, adding “market conditions today are the most extreme” since the early days of the company founded in 1991.
“The layoffs aren’t related to AI,” Sweeney noted amid industry worries the technology could replace video-game developers.