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‘Fortnite’ Studio Epic Games Cuts 830 Jobs, Plans to Divest Bandcamp

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The studio will scale back its workforce by 16 p.c because it evolves its flagship sport right into a “metaverse-inspired ecosystem for creators.”

Epic Video games — the studio behind the Unreal Engine and the online game Fortnite — is shedding about 830 staff, 16 p.c of its workforce, in a pivot of its enterprise technique.

In a observe to staff Thursday, Epic CEO Tim Sweeney outlined the plan, which incorporates shifting Fortnite to being a creator-driven platform.

“For some time now, we’ve been spending far more cash than we earn, investing within the subsequent evolution of Epic and rising Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney wrote. “I had lengthy been optimistic that we may energy by this transition with out layoffs, however on reflection I see that this was unrealistic.”

As well as, Epic Video games will divest its Bandcamp audio distribution platform (will probably be acquired by Songtradr, a music market), and its SuperAwesome promoting enterprise can be spun out as its personal firm as its founders have reacquired the agency.

“Epic people all over the world have been making ongoing efforts to cut back prices, together with transferring to web zero hiring and slicing working spend on issues like advertising and occasions,” Sweeney wrote. “However we nonetheless ended up far in need of monetary sustainability. We concluded that layoffs are the one manner, and that doing them now and on this scale will stabilize our funds.”

As for Fortnite, Sweeney writes that whereas it “is beginning to develop once more, the expansion is pushed primarily by creator content material with important income sharing, and it is a decrease margin enterprise than we had when Fortnite Battle Royale took off and started funding our enlargement. Success with the creator ecosystem is a good achievement, nevertheless it means a serious structural change to our economics.”

Learn Sweeney’s observe, under.

Hello everybody,

As we shared earlier, we’re shedding round 16% of Epic staff. We’re divesting Bandcamp and spinning off most of SuperAwesome.

For some time now, we’ve been spending far more cash than we earn, investing within the subsequent evolution of Epic and rising Fortnite as a metaverse-inspired ecosystem for creators. I had lengthy been optimistic that we may energy by this transition with out layoffs, however on reflection I see that this was unrealistic.

Whereas Fortnite is beginning to develop once more, the expansion is pushed primarily by creator content material with important income sharing, and it is a decrease margin enterprise than we had when Fortnite Battle Royale took off and started funding our enlargement. Success with the creator ecosystem is a good achievement, nevertheless it means a serious structural change to our economics.

Epic people all over the world have been making ongoing efforts to cut back prices, together with transferring to web zero hiring and slicing working spend on issues like advertising and occasions. However we nonetheless ended up far in need of monetary sustainability. We concluded that layoffs are the one manner, and that doing them now and on this scale will stabilize our funds.

We’re additionally making some divestitures. Bandcamp is becoming a member of Songtradr, a music market firm supporting artists. SuperAwesome’s promoting enterprise will change into an impartial firm beneath the SuperAwesome model, led by their present CEO Kate O’Loughlin. Children Net Providers (KWS), the mother or father verification and consent administration toolset, will stay a part of Epic. 

Saying goodbye to individuals who have helped construct Epic is a horrible expertise for all. The comfort is that we’re adequately funded to help laid off staff: we’re providing a severance package deal that features six months base pay and within the US/Canada/Brazil six months of Epic-paid healthcare. We’re providing to speed up individuals’s inventory choice vesting schedule by the top of 2024 and are giving two extra years from immediately to train the choices. Within the US we’re additionally providing to vest any unearned revenue sharing from their 401k. And we’ll present advantages together with profession transition providers and visa help the place we are able to.

For these nonetheless at Epic, you’ll hear extra from senior leaders in regards to the path ahead on your workforce. Epic’s prospects for the long run are sturdy. We now have superb sport experiences throughout a number of platforms. We’ve constructed the perfect engine on the earth, and can be internet hosting Unreal Fest subsequent week to carry the group collectively and highlight the issues they’re constructing with Unreal Engine and UEFN. Creators are making a residing constructing for the Fortnite ecosystem, with time in third-party video games now exceeding first-party. 

We’re slicing prices with out breaking improvement or our core strains of companies so we are able to proceed to concentrate on our bold plans. About two-thirds of the layoffs have been in groups exterior of core improvement. A few of our merchandise and initiatives will land on schedule, and a few could not ship when deliberate as a result of they’re under-resourced in the meanwhile. We’re pleased with the schedule tradeoff if it means holding on to our potential to realize our targets, get to the opposite aspect of profitability and change into a number one metaverse firm. 

-Tim

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