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Fortnite maker Epic Games Inc. is laying off 16% of employees, or 830 people.
The company also said it will divest Bandcamp, an online audio-distribution platform Epic acquired last year, and spin off most of its SuperAwesome subsidiary.
“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Epic Chief Executive Tim Sweeney said in an email to employees on Thursday. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Epic’s efforts to reduce costs through minimal hires and cutting spending on marketing and events “ended up far short of financial sustainability,” Sweeney said. “We concluded that layoffs are the only way, and that doing them now and on this scale will stabilize our finances,” he said.
The company, which continues its costly, years-long legal battle with Apple Inc.
AAPL,
in court over its App Store policies, including an onerous commission fee of up to 30%, remains focused on shipping the next Fortnite releases, Del Mar, Sparks, and Juno on schedule.
On Wednesday, the company asked the U.S. Supreme Court to review a California court ruling that found Apple’s App Store policies don’t violate antitrust laws. The filing is the latest in a long-brewing legal war between the companies, with billions of dollars in revenue at stake over how Apple runs its App Store.
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