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Epic Games lays off 800+ staff: CEO Tim Sweeney expects "degradation in quality"

Speaking at Unreal Fest, Sweeney acknowledged the layoffs and discussed the company’s next course
Epic Games lays off 800+ staff: CEO Tim Sweeney expects

Last week, Fortnite creator Epic Games laid off over 800 members of staff after finally feeling the impact of a post-pandemic games industry struggle. Overall, the layoffs represent 16% of Epic’s workforce and have become necessary as the company has spent "way more money than we earn".

Creator-led modes in Fortnite along with other new Epic endeavours have been challenging, CEO Tim Sweeney shared last week, though he assured that the company’s core games would not be taking a hit.

Now, a clip from the Unreal Fest conference is circulating on Twitter, in which Sweeney further discussed the layoffs on stage.

Addressing the layoffs

Sweeney started by noting that Epic has now "stabilised" its finances after realising there was a problem around 10 weeks ago. Following the layoffs, which streamlined the company down to what is "absolutely needed", Epic has ensured that it "won’t run out of money".

Evidence of maintaining elements that are 'absolutely needed' can be seen in Epic’s engineering team only having taken a hit of 3% in layoffs, meanwhile marketing and sales departments have seen over 30% of staff laid off. This is in line with the core goal of Epic Games, which Sweeney reinforced to be connecting "everybody together in real-time 3D in the metaverse". While noting Fortnite’s crossovers with major franchises from Disney and Marvel, he assured that this ambition will continue to drive the business despite the loss of staff.

"This is going to have implications for everything we do," he acknowledged. "It’s going to result in a degradation in quality of some of our work."

Turning things around after admitting this likely drop in quality, Sweeney stood in solidarity with the games industry against Unity’s Runtime Fee. "We can’t make our problems your problems," he said, raising the subject of Epic’s own engine for game developers. "Engine royalties have been discussed recently in the industry… Since we introduced the 5% revenue sharing model in 2014 the only conversations we’ve ever had about royalties are ‘can we lower them’."

Unity's Runtime Fee has been seeing major backlash from the entire industry since its reveal in September, with fees per install a big concern for many.