Epic Games, the developer behind the global hit Fortnite, has reportedly laid off around 1,000 employees as part of a major-cost-cutting move, with the company citing declining engagement and rising operational costs as key reasons.According to business statements, Epic Games now employs about 4000 people after the layoffs. The latest layoffs, which account for almost 20% of the company's staff, show a substantial restructuring effort.Prior to the layoffs, the company employed about 5,000 workers worldwide in a number of studios and departments, including publishing, game production, and its popular Unreal Engine platform.Following a previous round of layoffs in 2023, when Epic cut about 830 people, this action represents one of the biggest employment cutbacks in the game business in recent history.Epic Games CEO Tim Sweeney addressed the layoffs in a memo to employees, attributing the decision primarily to player engagement and financial imbalance. He stated that the company has been spending significantly more on Fortnite than they were making. He said:“And some of our challenges are unique to Epic. Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season.”Additionally, he underlined that the layoffs were caused by internal issues and more general economic pressures rather than artificial intelligence.The company claims that since 2025, there have been fewer active gamers on Fortnite than during earlier peak times. During the Simpsons Fortnite season in 2025, the game apparently reached a high involvement of almost 9 million players; however, since then, it has stabilized at lower levels at around 2.6-2.8 million players.Industry challenges faced by Epic GamesEpic Games attributed the layoffs to both internal and industry-wide issues. Sweeney wrote in his message:"This isn't our first time being here. Epic survived upheavals in 1990s with the move from 2D to 3D with Unreal 1; in the 2000s building console games with Gears of War; and in 2012 moving to online gaming with Paragon and Fortnite."He added:"Market conditions today are the most extreme we've seen since those early days, with massive upheaval in the industry accompanied by massive opportunity for the companies that come out as winners on the other side."Alluding to slower growth, more competition, and a customer change focus toward social media and other entertainment. The company is "only in the early stages of returning to mobile" platforms after the legal battle with Apple's App Store and Google's Play Store over app store payments.Epic also announced plans to reduce additional expenses totaling more than $500 million, including marketing and outside contracting.Employee's reaction to the layoffThe layoff in the company has sparked emotions and reactions from its Principal Fortnite Engineer, Evan Kinney. The developer, who has worked at Epic Games for almost a decade and has contributed a lot to the company. Fans and supporters showed their support for Kinney by referring to him as the “backbone of the development team” on X. He took to social media to express his confusion:“I am genuinely so confused and bewildered. Like, I spent the past week debugging the rivalry system while recovering from pneumonia, and just in the past few days I’ve had multiple directors tell me how much they appreciate everything I do.”He added:“I have done so much for this company and our games. So many late nights and weekends. So many live events, and competitive events, and new features, and new seasons. Solid performance reviews every time, with multiple people mentioning how critical I am and what an impact I make across multiple teams. Just to be thrown out. I don’t get it.”Despite the layoffs, Fortnite remains one of the most successful games ever. As Epic Games has shared its challenges, it remains to be seen how they jump back from this.Stay tuned to Soap Central for more information.