Amidst challenging financial conditions, 2023 has witnessed a number of tech giants laying off significant portions of their workforce. Now, in a recent development, Epic Games has reportedly announced plans to cut 870 jobs, impacting over 16% of its total workforce.
In an official statement, Epic Games CEO Tim Sweeney addressed the company’s financial situation and acknowledged the challenge of spending more than the company earns. Despite earlier assurances to employees about navigating these times through cost-cutting measures and hiring freezes, Sweeney stated that the layoffs were necessary to stabilize the company’s financial standing. However, it is important to note that a significant portion of the layoffs have impacted teams outside the core development.
“I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic,” said Tim Sweeney.
Divesting from other businesses
In addition to the job cuts, Epic Games is looking to sell Bandcamp, an online audio distribution company bought just last year, to Songtradr. Moreover, the company plans to spin off SuperAwesome, a “kid-tech” firm dedicated to creating safe online experiences for children, to make it an independent entity under the SuperAwesome brand, led by its current CEO, Kate O’Loughlin.
Furthermore, due to current economic challenges and currency fluctuations, Epic Games is also increasing the price of Fortnite V-Bucks in the United States and several other countries. The change will average around 12% to 15%, depending on the country, and will take effect on October 27.
Not the only company facing issues
While Epic Games’ decision to lay off employees after previous assurances is a cause for concern, it is not the only game developer facing economic hurdles. This is because major players, such as Embracer Group, have canceled projects, closed studios, and considered asset sales following the collapse of a substantial investment deal. Furthermore, even Activision Blizzard has undergone layoffs in various divisions, including its Hearthstone and Esports departments.
2023-09-29 15:04:27