Epic Games, the developer of Fortnite, is reportedly cutting staff primarily in its Metaverse division due to challenges in realizing its Metaverse ambitions. These layoffs reflect industry-wide difficulties, with companies like Netflix, Meta, and Twitter also scaling back their operations.
Epic Games is reportedly undergoing layoffs due to “unrealistic Metaverse ambitions,” according to sources. The company has not formally acknowledged these cuts, but insiders say the Metaverse division is bearing the brunt, putting hundreds of jobs at risk.
Epic Games have laid off 870 employees today across multiple departments, a whopping 16% of their workforce. Those laid off will receive 6 months severance
"For awhile now, we've been spending way more money than we earn, investing in the next evolution of Epic and Fortnite" pic.twitter.com/4W6Pn31CU3
— Jake Lucky (@JakeSucky) September 28, 2023
Epic Games has invested heavily in the Metaverse, but has yet to release any significant Metaverse products. These layoffs may reflect the challenges the company faces in achieving Metaverse’s goals. The Metaverse remains an emerging technology, and the timeline for mainstream adoption remains uncertain. Epic Games may be reevaluating the return on its investment in the Metaverse.
These layoffs also signal a broader slowdown in the technology industry. In recent months, several tech giants, including Netflix, Meta (formerly Facebook) and Twitter, have announced layoffs, citing factors such as rising interest rates and inflation in part.
Potential Implications of Epic Games Layoffs
Epic Games’ layoffs could have a negative impact. Loss of internal talent or expertise could impede the development of a Metaverse project. Morale among remaining employees may also suffer, leading to job insecurity, lower productivity, and less innovation.
Overall, these layoffs represent a difficult development for both Epic Games and the tech industry. These highlight the risky nature of Metaverse investing and highlight the broader economic slowdown impacting the technology sector.
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