Epic Games Lays Off 870 Employees Amid Strategic Refocus on the Metaverse

In a surprising and somber move, Epic Games has laid off approximately 870 employees — roughly 16% of its workforce — as the company redirects its focus toward building the metaverse. The news was confirmed today by CEO Tim Sweeney via an internal memo and subsequent press release, shaking both the gaming industry and the online creative community.

Sweeney cited long-term financial sustainability as the driving factor behind the layoffs. “We’ve been spending way more than we earn, investing in the next evolution of online interaction. But we’ve reached a point where this isn’t sustainable,” he said. Much of this spending has reportedly gone into Epic’s vision for the metaverse, a persistent, interconnected online space blending gaming, social interaction, and user-generated content.

Most of the layoffs appear to affect employees in publishing, marketing, and support functions, although some developers across multiple projects were also impacted. Notably, Epic-owned studios like Mediatonic — creators of Fall Guys — were hit hard, raising questions about the future of those IPs.

Despite the cuts, Sweeney reassured players that Epic remains committed to Fortnite and Unreal Engine, two of its cornerstone platforms. “Fortnite continues to grow as a metaverse-inspired ecosystem, and Unreal remains the engine of choice for the industry,” he emphasized.

Alongside the layoffs, Epic also announced the sale of Bandcamp, the indie music storefront it acquired just 18 months ago, and the spin-off of SuperAwesome, its kid-safe tech platform. Both moves reflect Epic’s strategy to re-center on its core gaming technologies and metaverse ambitions.

The layoffs come amid broader concerns about job stability in the gaming industry, which has seen similar cuts from companies like EA, Unity, and Embracer Group in recent months. While Epic’s long-term metaverse goals may offer innovative potential, today’s news is a stark reminder of the human cost behind grand visions.

As the dust settles, the development community will be watching closely to see if Epic’s gamble on the metaverse pays off — and whether more cuts are to come in an increasingly uncertain industry landscape.