Fortnite developer Epic Games has announced it will lay off 830 employees, which is approximately 16% of its workforce. The announcement comes as Epic Games continues to wage a legal battle with Apple, which began back in 2020.
Epic CEO Tim Sweeney made the announcement in a memo sent to employees and also shared on the company’s website. Sweeney said the company 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 went on to say that the layoffs are the only way to stabilize the company’s finances. On the bright side, if there is one, employees will receive severance including six months of base pay, as well as six months of paid healthcare.
The legal fight with Apple continues, while Sweeney claims Epic Games is working to cut legal expenses, he says the legal battle will continue, so the “metaverse can thrive and bring opportunity to Epic and all other developers.”
Epic earlier this week filed a request with the U.S. Supreme Court to hear the case, after the Fortnite published was hit by two major losses and heavy-duty legal fees. Epic’s legal team has attempted to paint Apple as an evil monopolist, as Epic cannot sell digital skins and other digital goods to iPhone and iPad players without paying a 30% cut of the action to Apple.
Epic pulled Fortnite from the App Store over the dispute, meaning the game has not been available to iPhone and iPad users for several years. Gamers are forced to play the game on other platforms if they’re looking for a little battle royale action.
The Supreme Court is the last chance for Epic following an appeal it lost earlier this year. In April 2023, we saw the Ninth Circuit Court of Appeals side with a lower court that had ruled that Apple’s App Store rules do not violate federal antitrust law by not allowing for third-party marketplaces.
Epic’s 488-page legal filing includes several reasons why the company believes the Supremes should hear the case, including errors made by the lower courts. Epic also says the case is significant, as the changes it is looking to force Apple to make in the App Store would impact thousands of developers.
The Supreme Court only accepts a fraction of the cases it is asked to review each year, so it could opt not to hear Epic’s case.
Apple may also ask for the Supreme Court to make a ruling on one portion of the Ninth Circuit Court of Appeals decision that didn’t go its way. When the appeals court upheld the lower court’s ruling it also upheld the mandate that Apple should allow developers to inform customers of purchasing options outside of the company’s App Store.
