Epic Games, the powerhouse behind the Unreal Engine and the ubiquitous battle royale Fortnite, has announced a sweeping reduction in force, impacting over 1,000 employees. The news surfaced via an official statement from founder and CEO Tim Sweeney, who shared a memorandum originally distributed to the internal team earlier today.
Simultaneously, the official Fortnite Status account revealed that the developer will sunset three of its newer experimental modes: Rocket Racing, Ballistic, and the competitive Festival Battle Stage. Epic admitted that while they have diversified the Fortnite ecosystem, certain offerings failed to gain the necessary traction to sustain long-term development. Rocket Racing is scheduled to remain operational until October 2026, but Ballistic and Festival Battle Stage will go dark much sooner, on April 16, coinciding with the v40.20 update.
Sweeney attributed the downsizing primarily to a “downturn in Fortnite engagement,” noting that the decline began in 2025 and has persisted despite various content updates. The CEO also pointed to broader macroeconomic pressures, such as sluggish console sales and industry-wide stagnation, alongside technical challenges inherent in maintaining a massive multi-platform service. Notably, Sweeney clarified that these layoffs were not the result of AI implementation, stating that the company remains committed to human talent where it drives productivity and high-quality content.
This organizational shift follows recent controversy regarding price hikes for V-Bucks. Players now receive only 800 V-Bucks for the $8.99 price point that previously netted 1,000. Epic’s justification—that the “cost of running Fortnite has gone up”—was met with skepticism and mockery by a community weary of corporate financial maneuvering.
The layoffs at Epic Games represent just the latest chapter in a turbulent year for the gaming industry. Despite only being three months into 2026, the sector has been rocked by significant contractions. Just last week, Crystal Dynamics reduced its headcount, and Battlefield Studios faced cuts despite a successful launch. Other casualties include Ubisoft’s Red Storm Entertainment, the total closure of Highguard, and Riot Games’ downsizing immediately following the debut of 2XKO. Perhaps most shocking was Sony’s recent decision to shutter Bluepoint Games, the acclaimed studio behind the Demon’s Souls remake.
Our thoughts are with the developers and staff members at Epic Games whose livelihoods have been affected by today’s announcement.
