In a nutshell: Epic Games has confirmed plans to lay off around 830 employees, or roughly 16 percent of the company’s workforce. In an e-mail sent to employees that was also shared online, Epic Games CEO Tim Sweeny said they’ve been spending more money than they earn for a while now. He hoped they’d be able to weather the storm by implementing measures like net zero hiring and reducing their marketing budget. In retrospect, Sweeny said, this hope was unrealistic.
Most of the job cuts – about two-thirds – impact teams outside of core development units. In fact, Epic is not cutting any core businesses. The labor reduction could impact some product shipment schedules, but it is a trade-off they can accept if it means Epic will still be able to eventually achieve its goals of getting to the other side of profitability and becoming a leading metaverse company.
Epic is also divesting Bandcamp, the audio distribution it acquired in March 2022. Bandcamp will be joining music marketplace Songtradr, we are told. Furthermore, Epic Games will be spinning off most of SuperAwesome, which it picked up in 2020.
Around 250 of the job cuts involve Bandcamp and SuperAwesome staffers.
Sweeny said that having to say goodbye to folks that helped build Epic is terrible, but was thankful they are in a position to support laid off employees. Epic Games is offering a severance package that includes six months of base pay plus six months of paid healthcare for those in the US, Canada, and Brazil. The company will also accelerate stock option vesting schedules through the end of 2024, and will provide two additional years from today to exercise the options. Career transition services and visa support will also be available where applicable.
Epic confirmed that no additional layoffs are in the works, and that the announced changes will financially stabilize their business. Hiring for critical roles will continue, but Epic plans to mostly stick with its new size structure for a while.
