Epic Games announced layoffs of over 1,000 employees, representing about 20% of its workforce, citing declining player engagement with Fortnite. CEO Tim Sweeney stated the company is "spending significantly more than we're making" due to the downturn in Fortnite engagement that began last year. This marks the second major workforce reduction in recent years, following 830 job cuts in 2023.

The layoffs come despite Fortnite maintaining its position as a leading game, topping monthly active users on both PlayStation and Xbox in February. However, average playtime has decreased significantly—PlayStation users played for 16 hours last month compared to 21 in February 2025. Epic recently raised prices for V-Bucks, its in-game currency, to address rising operational costs.

Industry analysts note Epic faces broader challenges including slower market growth, weaker consumer spending, and intense competition for entertainment time from social media platforms. "We're witnessing in real-time the decline of American cultural dominance in gaming," said Joost van Dreunen, NYU professor. Epic is implementing over $500 million in cost savings across contracting, marketing, and open positions to stabilize the company financially.