Epic Games Slashes 16% of its Workforce, Cites ‘Unrealistic’ Targets on Metaverse Projects
The North Carolina video game and software developer Epic Games has joined the slew of companies downsizing their workforce to sustain operations. In a September 29 update, Epic Games confirmed to reduce 16% of the workforce. It implies that 830 employees will be leaving the office.
Epic Games Downsizes
The report indicated that Epic Games had anticipated that its metaverse project would generate substantial returns in the coming days. Reportedly, the company projection failed to materialize, exposing the firm to incur additional costs.
In an internal memo, Epic Games chief executive Tim Sweeney explained that the unrealistic expectations of metaverse projects compelled the firm to reduce its headcounts to sustain its operation. The CEO regretted that the returns from the metaverse-oriented projects were “way less” than the actual spending. The Epic Games boss underlined that headcount reduction was the only suitable solution to support the company in maintaining its finances.
In his admission, Sweeney anticipated that Epic Games could smoothly migrate its project to the metaverse without cutting off its workforce. After analyzing the past events, the CEO regretted that the company’s metaverse ambition was unrealistic.
Epic Games Realizes Unrealistics Targets on Metaverse Projects
Sweeney confessed that the Epic Games invested heavily in building the Fortnite Creator program, latest version Creator Economy 2.0. This program provides the creators and developers an exciting opportunity to create their content for Fortnite.
In return, the creator is allowed to sell the content and receive rewards. The report indicates that the gaming company pays out 40% of the revenue generated from Fortnite to eligible content creators. Based on reward features, the profit margins realized from Fortnite have significantly plummeted.
The Epic Games CEO admitted that by launching of the Fortnite Creator Economy 2.0. it emerged as a “great achievement.” Despite the remarkable achievement, Epic Games is forced to adjust its economics to sustain success.
Epic Games Announces Second Round Lay Off
According to the Memo, the CEO confessed that Epic Games anticipates a second round layoff that will affect around 250 employees. In line with the September 29 announcement, the CEO revealed that the gaming company plans to dispose of its recently acquired music website, Bandcamp.
The executive confessed that despite the sudden change in the company structure, Epic Games will pursue ways to expand its revenue-generating streams. The announcement illustrated that Epic Games plans to revive the operation of its marketing company, SuperAwesome, to increase the firm’s profitability.
In the latter, the gaming company outlined the compensation plan for the first batch of the dismissed employees. The CEO stated that all the newly dismissed staff will receive a six-month pay. Subsequently, the employees residing in the US, Canada, and Brazil will receive a six-month healthcare cover.
Editorial credit: DANIEL CONSTANTE / Shutterstock.com
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