Epic Games lays off 1,000 staff as its CEO says the cuts aren’t tied to AI

Epic Games, the online game maker behind Fortnite, is shedding greater than 1,000 staff amid “extreme” market circumstances and a downturn in engagement with its hottest recreation, CEO Tim Sweeney said in a weblog put up Tuesday.

Its profitable on-line online game Fortnite, which Epic developed in 2017, is now dealing with competitors from “other increasingly-engaging forms of entertainment,” Sweeney mentioned. 

Fortnite, which is out there on a number of platforms such because the Nintendo Switch and Sony PlayStation, provides a battle-royale format the place gamers compete to be the final one standing. But weaker client spending and sluggish demand for brand spanking new online game consoles have made the job cuts needed, Sweeney mentioned.

Other forces contributed too, he added — though not synthetic intelligence.

“Since it’s a thing now, I should note that the layoffs aren’t related to AI,” Sweeney wrote. “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”

More firms have cited synthetic intelligence in current months when saying layoffs, together with Amazon and Pinterest. While AI has the potential to displace white-collar staff, there’s little proof that it has to date led to widespread job losses, in accordance to Anthropic researchers.

$500 million in price financial savings

To maintain the corporate funded, Epic must make “major cuts” as its spending is outpacing its income, he added. In addition to the layoffs, the corporate mentioned it has recognized greater than $500 million in price financial savings that can assist stabilize it.

It’s presently engaged on optimizing Fortnite for cellular gadgets, the place customers more and more have interaction with leisure content material.

Epic staff affected by the layoffs will obtain at the least 4 months of base pay as severance, plus well being care advantages for six months within the U.S., the corporate mentioned.