Epic Games, the popular video-gaming giant based in Cary, announced a round of layoffs recently, with CEO Tim Sweeney attributing it to excessive spending. The layoffs are expected to affect approximately 16% of Epic’s workforce, which translates to around 830 employees. Sweeney stated that the company plans to sell off Bandcamp and spin off most of SuperAwesome, leading to around 250 job cuts.
Sweeney expressed his initial hope of avoiding layoffs but soon realized it was an unrealistic expectation. The phenomenal success of Fortnite, with its revenue-sharing model for creator content, has driven its growth but also resulted in lower-profit margins. As a result, Epic Games is now faced with the need to reduce costs for financial sustainability.
While the impact of these layoffs on Epic’s headquarters in Cary remains unclear, it is worth noting that the company has 40 offices worldwide. The majority of the layoffs are expected to affect teams outside of core development. However, the laid-off employees will receive a severance package that includes six months of base pay and continued healthcare coverage. Additionally, their stock options will be accelerated, providing some financial support during this transition period.
Epic Games CEO Tim Sweeney has emphasized that he does not anticipate any further layoffs, suggesting that the recent cuts were an unfortunate but necessary step towards the company’s long-term stability. It is uncertain how these layoffs might affect Epic’s plans to build a campus at the old Cary Towne Center, a project that has generated excitement and anticipation among locals.
Cary Mayor Harold Weinbrecht expressed disappointment over the layoffs but reiterated his support for Epic and its future plans. He acknowledged that these changes are part of the business landscape and expressed confidence that Epic Games will overcome this setback and continue to be a valuable asset to the community.
As Epic Games navigates this challenging period, the gaming community and industry observers will be closely watching to see how the company adapts and strategizes for sustained success.