Epic Games has announced the layoff of 1,000 employees as part of cost-cutting efforts.

This was disclosed in a letter sent to staff by the company behind the popular game Fortnite.

The letter, dated March 24, was signed by Chief Executive Tim Sweeney.

It stated that the layoffs follow a significant drop in engagement with the company’s flagship game, Fortnite.

“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we’re only in the early stages of returning to mobile and optimising Fortnite for the world’s billions of smartphones,” Sweeney wrote.

Sweeney also said the job cuts, combined with about $500 million in savings from reduced contracting, marketing, and the closure of certain open roles, are expected to significantly cut overall expenses.

He added that affected staff will receive severance packages of at least four months’ base pay, with additional compensation based on length of service.

The company has also extended paid healthcare coverage for affected employees, though the criteria for the layoffs have not been disclosed.

Sweeney noted that the move reflects broader challenges facing the gaming industry.

“Some of the challenges we’re facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other increasingly engaging forms of entertainment,” he said.