Epic Games Lays Off Over 800 Employees as Apple Legal Battle Drags On

[MacRumors]

Epic Games, the company behind popular video game Fortnite, is laying off 830 employees or approximately 16 percent of its workforce. The layoffs come amid Epic's ongoing legal battle with Apple, which started way back in 2020.

Just this week, Epic Games asked the Supreme Court to hear the case, a request that follows two major losses and likely hundreds of thousands or more in legal fees. Epic Games has been trying to paint Apple as a monopolist, and it wants to be able to sell digital skins and other goods to Apple customers without having to pay a cut to Apple.

As a result of the legal dispute, Fortnite has been unavailable from Apple's App Stores for several years now, and those who want to play the game on the iPhone or iPad must seek alternate means to do so, such as web-based platforms.

Epic CEO Tim Sweeney in a memo sent out to employees and shared on the company's website said that it has been "spending way more money" than it earns to grow Fortnite, and other efforts to cut costs have "ended up far short of financial sustainability."

Sweeney says that layoffs are the only way to stabilize the company's finances. Employees will be provided with severance that includes six months of base pay and six months of paid healthcare.

As for the fight against Apple, Sweeney claims that Epic Games is taking steps to cut down on legal expenses, but will continue on with its legal battles so the "metaverse can thrive and bring opportunity to Epic and all other developers."

Article Link: Epic Games Lays Off Over 800 Employees as Apple Legal Battle Drags On

 

[markfc]

How much does each launch of the party bus cost?

 

[Will Co]

Give it up already, Epic.

 

[easy4lif]

epic was warned that they didn’t have much of a case, but Tim Sweeney went ahead anyways. Of course the CEO could’ve taken a pay cut and save those jobs, but guess he decided meh.

 

[Mazda 3s]

I wonder what this means for their new HQ they're building nearby me in Cary, NC? They bought a whole shopping mall to demolish and rebuild for a sprawling campus.

 

[Juicy Box]

Epic Games, the company behind popular video game Fortnite, is laying off 830 employees or approximately 16 percent of its workforce. The layoffs come amid Epic's ongoing legal battle with Apple, which started way back in 2020.

To be fair, there has been mass layoffs in the tech industry over the last year, with the gaming industry hit pretty hard.

While I am sure the legal issues have not helped Epic, they are not alone when it comes to layoffs.

 

[sparkinstx]

How much does each launch of the party bus cost?

Like a boxer who was once asked by recently retired sportscaster Norm Hitzges how much his robe cost, "A lot, man, a lot."

 

[tomnavratil]

Tim Sweeney's ego in play unfortunately. Not much of a solid case against Apple (in most areas) and decided to start a battle anyway, oh well.

 

[lotones]

800+ employees laid off. Meanwhile years of lost profits by not being available on iPhone, and their lawyers get richer by the hour.

Brilliant business model.

 

[sparkinstx]

I wonder what this means for their new HQ they're building nearby me in Cary, NC? They bought a whole shopping mall to demolish and rebuild for a sprawling campus

Maybe they can move into the construction trailer?

 

[turbineseaplane]

Let’s not pile on please

People are losing their jobs

 

[miamialley]

CEO not taking a pay cut, right?

 

[GMShadow]

Tencent money running out I guess.

 

[Mazda 3s]

Let’s not pile on please

People are losing their jobs

Yeah, I find nothing funny in people losing their jobs. I don’t blame them for the actions of the CEO and his executive team.

 

[rubenhas]

Makes sense. It’s not like their $9 billion dollar cash cow could keep it afloat.

 

[Ethosik]

epic was warned that they didn’t have much of a case, but Tim Sweeney went ahead anyways. Of course the CEO could’ve taken a pay cut and save those jobs, but guess he decided meh.

Agreed. This is why I don’t like public and big companies. C-suite employees will still get massive bonuses but their decisions are causing people to be fired/layoffs in bad economic times.

 

[pacalis]

It's a terrible situation. Layoffs are another inditement of poor management.

They should have fixed their governance and leadership after that disastrous 1984 video that followed their breach of contract with Apple. However, that's impossible given they company is ruled by Sweeny and Tencent.

 

[tomnavratil]

Agreed. This is why I don’t like public and big companies. C-suite employees will still get massive bonuses but their decisions are causing people to be fired in bad economic times.

On the other hand, in good economic times many employees end up with huge bonuses and stock options. Many people in IT take a calculated risk with every move they make. Is it risky? Sure but you could make a fortunate too.

 

[HouseLannister]

But how many lawyers did they lay off?

 

[iZac]

They should be hiring, the Unity debacle will bring in a bunch of new devs for them to support.

 

[mannyvel]

The App Store dispute has really kneecapped epic. Maybe at some point it'll be worth it, but Epic really hasn't benefitted from it at all.

If Epic was public, shareholders would probably sue them for breach of fiduciary duty.

 

[pacalis]

On the other hand, in good economic times many employees end up with huge bonuses and stock options. Many people in IT take a calculated risk with every move they make. Is it risky? Sure but you could make a fortunate too.

Agreed in most cases. For EPIC it seems they're being generous with vesting, but I don't think that employees own nearly any amount of this company so it might not be so generous after all.

 

[spazzcat]

Think of all the lost revenue from Apple's platform they didn't have to lose but chose to lose...

 

[Spaceboi Scaphandre]

Gee! It's almost as if burning billions of dollars on exclusivity deals that don't work, as well as picking a slapfight with Apple over your philosophy of app distribution was a bad idea or something.

We've known since discovery from the trial, all of Epic Games' money problems are because of Tim Sweeney's decision making. He is not a good businessman in the slightest and is ignoring his employees. He needs to go.

 

[kc9hzn]

I wonder what this means for their new HQ they're building nearby me in Cary, NC? They bought a whole shopping mall to demolish and rebuild for a sprawling campus.

Pretty classic move. Ambitious construction projects take multiple years to come to fruition and typically get commissioned when companies are riding high at the top of a bubble. And when the economic conditions take a nose dive, you end up with an unprofitable, mostly empty building, assuming it even gets finished in the first place. So much money and resources tied up in buildings that never end up fulfilling their original purposes and that may never end up getting finished in the first place.