San Francisco (AFP) – Epic Games, the maker of the wildly popular video game Fortnite, announced a social plan Thursday to save money even as it continues to spend money on its legal battle against Apple and Google.
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Epic will lay off about 830 people, or 16% of its workforce, according to a copy of an email sent to employees by CEO Tim Sweeney and posted on the company’s website.
“We’ve been spending far more money than we’ve been making for some time, investing in Epic’s next release and developing Fortnite as a creator ecosystem inspired by the metaverse,” Mr. Sweeney told employees.
“I have long been optimistic that we could move forward without layoffs, but in retrospect, that was not realistic.”
Fortnite’s growth has returned, but it is driven by creator content, which means a significant share of the company’s revenue, according to Mr. Sweeney, who founded the company in the 1990s.
“The success of the creator ecosystem is a great achievement, but it represents a major structural change in our economic model,” he said.
According to the CEO, layoffs are the only way to stabilize finances, even if they lead to a delay in development.
“Some of our products and initiatives will be delivered on schedule, while others will not because they are currently under-resourced,” Sweeney said.
While Epic has taken steps to reduce legal costs, the company “continues to battle distribution monopolies and taxes from Apple and Google,” he also noted.
Epic has been battling Apple and Google in U.S. courts for years over the rules and fees charged by their respective app stores that allow consumers to download video games such as Fortnite on their smartphones and tablets.
Epic also decided to sell Bandcamp, the online music store it acquired early last year, and spin off the advertising business of another division, according to the email.
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