Cary, North Carolina, March 28, 2026, 13:08 EDT.
On March 24, Epic Games announced plans to lay off over 1,000 employees following weaker player engagement for Fortnite. The move—a significant one for the studio responsible for what Epic still calls one of the world’s top games—has sent a chill through the broader video-game sector.
Fortnite’s position as a bellwether for live-service games is under scrutiny now, since these titles depend on ongoing updates and player spending instead of single-purchase sales. Reuters noted that in February 2026, Fortnite still topped PlayStation and Xbox for U.S. monthly active users, but average playtime took a steep dive—a concerning trend for a business built on steady content spending.
Chief Executive Tim Sweeney told employees in a March 24 memo that Epic would cut over 1,000 jobs and seek more than $500 million in savings, targeting contracting, marketing, and open positions to stabilize operations. The AP put the layoffs at roughly 20% of staff, bringing Epic’s headcount down to about 4,000—this is the company’s second major round of job cuts since 2023.
Sweeney said Epic has been “spending significantly more than we’re making,” with growth cooling, spending down, console sales lagging and competition for user attention heating up—all putting pressure on the business. He mentioned other trouble spots as well: Fortnite seasons have been inconsistent, and the company’s effort to bring Fortnite back to mobile still isn’t there after years of battling Apple and Google over app stores. Epic Games Store
Outside Epic’s own memo, the engagement picture looks even tougher. Ampere Analysis research director Piers Harding-Rolls told Game Developer Fortnite’s peak monthly active users on PlayStation and Xbox dropped 28% from 2023. Average monthly playtime? Down to 15.4 hours in 2025, compared to 29 hours in 2023. “This will not get any easier,” he said. Game Developer
That’s part of the reason these layoffs ripple beyond Epic itself. Even though major online titles continue to attract crowds, supporting them gets costly as player engagement drops. Publishers are still on the hook for rolling out new seasons, staging live events, and shipping updates.
Competition isn’t letting up. Roblox just pulled ahead of Fortnite in both average playtime and daily visits for the first time, according to Harding-Rolls. Electronic Arts cut 300 to 400 jobs and scrapped a Titanfall game last year, Reuters noted—yet another indication big publishers are trimming back, even with longstanding franchises.
Epic’s move carries risk. Sweeney told employees the company has to double down on stronger seasonal content, gameplay, story, and live events—even as it pushes ahead with developer tools and the next Unreal. That’s no small task with fewer people, especially if engagement keeps falling. Epic added, “The layoffs aren’t related to AI.” Epic Games Store
Epic is offering at least four months of base pay to those impacted, with longer-tenured staff getting more. U.S. healthcare coverage sticks around for six months, stock vesting jumps ahead to January 2027, and employees have up to two years to exercise equity. The package softens the impact, though, for Epic, it marks a second sweeping layoff in three years.
Sweeney told staff Epic is aiming for some big launches late in 2026. The stakes are clear: if those releases can’t breathe new life into Fortnite, plenty of people across the industry—already battered by stagnant growth and layoffs—will be watching.
