Epic Games, the Cary-based maker of Fortnite and other video games, is laying off 1,000 workers — including more than 200 in Cary — and plans cut hundreds of millions of dollars in additional costs as it grapples with a downturn in sales.
In a note to employees, released Tuesday, the company cited slower engagement with its popular Fortnite — one of the world’s most popular titles — as a key contributor to the need to cut costs. Epic also said industry trends, including higher costs, slower sales of newer consoles and competition for time from other forms of entertainment.
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“We're spending significantly more than we're making, and we have to make major cuts to keep the company funded,” Tim Sweeney, Epic’s chief executive, said in the memo to employees.
Epic has offices across the Americas. In a letter to state officials on Tuesday, the company said it would permanently lay off at least 211 workers assigned to the company's Cary headquarters, including artists, engineers, programmers and designers.
"We are mindful of the difficulties that this layoff poses to employees and the community," Monika Fahlbusch, an Epic human resources executive, wrote to state Department of Commerce officials. The letter was sent to comply with a federal law that requires companies to notify officials of mass layoffs.
It wasn't immediately clear where the other layoffs would occur or if more layoffs were planned. A company representative didn’t immediately respond to a request for more information.
“It is very painful to part with so many talented people,” Sweeney wrote. The company said laid-off employees would receive a severance packages including at least four months of base pay, as well as extended health insurance, plus other benefits. The company is expected to meet with employees later this week.
Epic has been engaged in lengthy antitrust lawsuits with Apple and Google parent Alphabet Inc. over fees tied to in-app payments, among other issues. The company is in the early stages of returning to mobile platforms, the company said in the memo. “In being the industry's vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers,” Sweeney said.
“This isn't our first time being here,” Sweeney added, pointing to previous company shakeups. “Each time, we rebuilt our foundations and earned a renewed leadership position.”
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,” he said.
The announcement comes on the heels of cuts at another video-game developer in Cary. Last week, Red Storm Entertainment said it planned to eliminate 105 jobs at its Cary headquarters.
In a letter to state officials, Red Storm said it planned to permanently lay off designers, artists, engineers and other employees, citing “economic forces.” The company said it is ceasing game development and retaining some engine development employees.
The cuts are expected to start in May and continue into September, the company said in its letter.
