While 1/6 of the company’s employees leave, development and key goals are not affected by the layoffs.
Tim Sweeney, president of Epic Games, wrote a circular to the company’s employees, which was published in a Q&A blog post. This is slightly abbreviated, but translated into Hungarian: “As we have already announced, we are laying off about 16% of Epic’s employees. For some time now we have been spending much more money than we earn; we are investing in the next evolution of Epic and developing Fortnite as an ecosystem Inspired by the metaverse of creative creators. I was optimistic for a long time that we could get through this transformation without layoffs, but in retrospect I realize that wasn’t realistic. Although Fortnite is starting to grow again, growth comes first The first is from creator content with a significant revenue share, and it’s a lower-margin business than it was when Fortnite Battle Royale launched and started funding our expansion. The success with the creative ecosystem is a great result, but it means a big structural change in our economy. Epic employees around the world are making ongoing efforts to reduce costs, including moving to net zero hiring and reducing operating expenses for things like marketing and events. But even so, we are far from financially sustainable. We have come to the conclusion that layoffs are the only solution, and that If we do it now and on this scale, we will be able to stabilize our finances.
We are also divesting some companies. Bandcamp joins Songtradr, a music marketplace company that supports artists. SuperAwesome’s advertising business will become an independent company under the SuperAwesome brand, led by current CEO Kate O’Loughlin. Kids Web Services (KWS), a set of parental controls and consent management tools, will remain part of Epic. Saying goodbye to the people who helped build Epic is a terrible experience for everyone. It is a relief that we have sufficient financial coverage to support laid-off workers: we offer a severance package that includes six months of base salary and six months of paid health care from Epic in the US, Canada and Brazil. We are offering to accelerate the servicing schedule for people’s stock options to the end of 2024, giving an additional two years from today to exercise the options. In the US, we also offer 401k unearned profit sharing. We also offer benefits where possible, including career transition services and visa support.
Those still working at Epic will hear more from senior management about their team’s next steps. The saga’s view of the future is powerful. We have amazing gaming experiences across multiple platforms. We’ve built the best engine in the world, and next week we’ll be hosting Unreal Fest to bring the community together and highlight the things they’re building with Unreal Engine and UEFN. Creators make a living building the Fortnite ecosystem, with time spent on third-party games already outpacing first-party games. We are working to reduce costs without disrupting development or our core business, so that we can remain focused on our ambitious plans. About two-thirds of the layoffs were in teams outside core development. Some of our products and initiatives arrive on time, and we may not be able to deliver them on schedule due to insufficient resources at this time. We don’t mind compromising on schedule if it means maintaining our ability to achieve our goals, turn upside into profitability, and become a leader in the Metaverse.
[…] We remain focused on delivering our critical initiatives: the upcoming Fortnite Season and Fortnite Chapter 5, Del Mar, Sparks, and Juno. Their schedules stay in place. We are not interrupting any core activities, and we continue to invest in games by developing the first division in Fortnite, the ecosystem and economy of Fortnite creators, Rocket League and Fall Guys; And services for developers, including Unreal Engine for Games and Enterprise, Epic Games Store, Epic Games Publishing, Epic Online Services, Kids Web Services, MetaHuman, Twin Motion, Quixel Mega Scans, Capturing Reality, ArtStation, Sketchfab, and Fab. […] We are laying off approximately 830 employees, which represents 16% of jobs. About two-thirds of the layoffs were in non-core development teams. About 250 people are leaving Epic to sell Bandcamp and SuperAwesome. We reduce costs without sacrificing development or business lines, which means business functions are disproportionately impacted compared to development functions. […] These changes stabilize the business financially. The whole goal of this process was to make our cost structure more sustainable, and we believe we have achieved that. What about the Freedom Project? “We have taken steps to reduce our legal costs, but we will continue to fight the distribution and tax monopoly by Apple and Google so that the Metaverse can thrive and provide opportunities for Epic and all other developers,” Sweeney wrote.Therefore, the 40% owed to external Fortnite creators reduces the company’s revenue. Del Mar is rumored to be a racing mode of sorts, and Juno is covering a collaboration with Lego. But this isn’t the first case of layoffs this week: SEGA fired a fair number of people at Creative Assembly…
source: WCCFTech
