Recently, the gaming industry has seen a rise in layoffs, with well-known companies like Embracer Group, Sega, and Blizzard saying farewell to their employees due to financial reasons, for the most part.

Following failures like Immortals of Aveum, Ascendant Studios parted ways with 45% of its developers. Similarly, studios like Volition Games were completely shut down after the poor reception of Saints Row.

Epic Games is also jumping on this trend, laying off around 16% of its workforce.

Why it matters: Due to the current global economic situation and the rise in game production costs, these large corporations make difficult choices in order to meet their profit goals.

Epic Games Blog Post
Epic Games Blog Post

Epic Games CEO Tim Sweeney recently shared an email with Epic employees where he stated: 

“We are laying off around 16% of Epic employees. We’re divesting from Bandcamp and spinning off most of SuperAwesome.”

This is going to significantly reduce the Fortnite and Unreal Engine developer’s workforce, as Epic Games is going to be losing around 830 employees from its workforce of around 5,000 employees. Tim Sweeney also stated:

“We’ve been spending way more money than we earn.”

Such statements make it clear that Epic Games had to make this difficult choice due to financial difficulties, as Tim Sweeney indicated that they were falling back on profits.

Additionally, Epic Games is preparing to raise the cost of V-Bucks, the in-game currency in Fortnite, which further clarifies that the firm is taking multiple measures to improve its financial status.

Tim Sweeney did, however, offer some encouraging news when he said that there would not be any further layoffs because the entire purpose of this process was to make their cost structure more sustainable.

Furthermore, he suggested that core teams remained unaffected by the layoffs, with Epic Games continuing its focus on popular games and Unreal Engine.

Epic Games Store
Epic Games

This year has been one of the worst years for employees, as it led to some of the biggest layoffs, even beyond the gaming industry.

One reason for such layoffs has to do with the fact that these large firms built enormous workforces during the COVID era that they no longer needed once the period ended. Similarly, massive failures in the gaming industry have also contributed to layoffs.

Recently, Sega canceled its live service game, Hyenas. This also led to layoffs at Creative Assembly, while Activision Blizzard let go of a few developers from the Hearthstone team a few days ago.

Although such layoffs are unfortunate, this is a part of the business. Nonetheless, the industry can only hope that the impacted developers are able to quickly stand up on their feet and find positions elsewhere to utilize their talents.

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Avinash Jaisrani
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