Disney partner Epic Games announced today, March 24, 2026, that it is laying off 1,000 employees as part of a new cost-saving measure.

Epic Games Layoffs

Epic Games alerted employees today that 1,000 people would be laid off as part of a $500 million cost-saving strategy “to keep the company funded.” This strategy also includes “cost savings in contracting, marketing, and closing some open roles[, which] puts us in a more stable place.”

The release from CEO Tim Sweeney points to a “downturn in Fortnite engagement” as part of the reason the company is spending more than it’s making. It also explained that some of the issues the company is facing are an industry-wide phenomenon in areas such as cost economics and consoles selling less than previous iterations.

However, Sweeney’s release also explained that some of the problems are unique to Epic:

And some of our challenges are unique to Epic. Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we’re only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones; and in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers.

Sweeney emphasized that the layoffs are not related to AI and that moving forward, the company must focus on expanding Fortnite experiences and building on the developer tools they have in place for “huge launch plans” near the end of 2026. The release ends with a note that there will be a company meeting on Thursday, assuming March 26, 2026, “to talk about the roadmap in more detail.”

Disney and Epic Games Partnership

Just last week, we reported that the restructuring and expansion of Disney Entertainment would include the current partnership with Epic Games. Under the leadership of incoming president and chief creative officer Dana Walden, the partnership is shifting from Experiences to the Entertainment division.

Before, Disney Games fell under the purview of Disney Parks & Experiences, the division headed by incoming CEO Josh D’Amaro. Sean Shoptaw, Executive Vice President of Games and Digital Entertainment, is instrumental in Disney’s ongoing collaboration with Epic Games, the developers of Fortnite. The partnership has proved especially fruitful, Shoptaw citing the storytelling potential of Fortnite as a key avenue to connect with younger audiences during a SXSW 2026 panel.

Disney and Fortnite

Disney has had several successful content rollouts within Fortnite since the partnership was announced in February 2024. At SXSW in 2025, Disney suggested that their universe in Fortnite may connect to the guest experience at Disney Parks. They’ve come close: Disneyland Game Rush introduced several minigames themed to park attractions in celebration of Disneyland’s 70th anniversary, with themed challenges and cosmetic rewards.

Players could become half-divine campers at Camp Half-Blood to prepare for season two of Percy Jackson and the Olympians on Disney+. Tsum Tsum lovers can bring their collection to the Fortnite battlefield with Disney character “back bling” cosmetics, while a new Hoppers cosmetics bundle lets players channel their inner Tom the Lizard.

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