Epic lays off 16 percent of staff due to transition to metaverse economy

Game developer Epic is laying off 830 people. That is about sixteen percent of the workforce. The company is also divesting Bandcamp. According to Epic, the move towards a metaverse economy costs more money than it yields.

CEO Tim Sweeney writes in an email to employees that it is laying off about sixteen percent of its employees. This concerns 830 employees, of which approximately a third worked as developers. Epic also says it is shutting down music store Bandcamp and the SuperAwesome Kids Web Services children’s developer platform, which Epic took over in 2020. 250 of the dismissed employees worked in those two departments.

Epic says the layoffs are necessary to reduce the company’s costs and expenses. That is why CEO Sweeney also swears that the current layoffs will remain the same. Epic says it will continue to pursue lawsuits against Apple and Google. These lawsuits have been dragging on for years and are also costing the company a lot of money. Although Epic says it is trying to reduce those costs, it is continuing with the lawsuits.

According to Epic, an important cause lies in the metaverse costs that the company incurs. Epic is now trying to convert Fortnite into a metaverse ecosystem for ‘creators’, instead of just being a battle royale game. “I have long been optimistic that we could get through that transition without layoffs, but in retrospect I see that that was unrealistic,” Sweeney said.

“While Fortnite is growing again, that growth is primarily driven by creator content that requires a lot of profit sharing,” Sweeney added. That means Epic’s profit margins are smaller and can no longer support its entire workforce. “Success in the creator ecosystem is a great achievement, but that means major structural change to our economy,” says Sweeney.