Fortnite maker Epic Games announced plans to downsize personnel as it seems as if the company’s eyes were bigger than its pocketbook.
CEO Tim Sweeney announced that the company would cut 800 workers which is approximately 16% of its workforce.
The company expanded on the shoulders of its wildly successful virtual online battle game, Fortnite, which is played by half a billion people worldwide.
As late as last year, Epic continued to seek outside investment to spur its growth and received $1 billion each from Sony and Lego parent Kirkbi, which took the company’s valuation north of $30 billion.
That round of funding helped continue the company expansion and a series of acquisitions including the music platform Bandcamp.
As part of the layoff, Epic also announced that it would resell Bandcamp to Songtradr.
These moves are seen as preparation for Epic to seek more funding by making the company’s bottom line more palatable.
The last year has seen a dose of reality inserted into the gaming world.
Swedish gamer Embracer Games saw a $2 billion investment round fall apart causing the company to restructure.
Embracer acquired the IP rights for Lord of the Rings for nearly $400 billion in 2022.
Dragon Age maker, Bioage, laid off nearly 50 workers earlier this year.
Epic Games Sweeney said, “Saying goodbye to people who have helped build Epic is a terrible experience for all.”
He later added, “For a while now, we’ve been spending way more money than we earn. I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.”