This week,Epic Games laid off nearly 900 employees, a whopping 16 percent of its workforce. These cuts were announced to the team in a staff memo from CEO Tim Sweeney. “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators," Sweeney wrote. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic.”
Sweeney said that cost-reducing efforts were insufficient to stop Epic from haemorrhaging money, and layoffs were “the only way”. It’s especially strange that Epic is firing nearly 1,000 people, consideringit raised a billion dollars in investment in 2021and receiveda billion dollars each from Sony and Lego parent company Kirkbijust last year. Epic even bought Bandcamp in 2022, which, according to CEO Ethan Diamond, was to help build “the most open, artist-friendly ecosystem in the world”. Now, just a year and a half later, Epic is selling it off to music marketing company SongTradr. For the record,Tim Sweeney’s wealth has been valued at $9.6 billion by Bloomberg. I don’t have an MBA, but I think a lot about the numerous CEOs who have taken huge pay cuts to prevent their employees from getting laid off. Most famously, late Nintendo chief Satoru Iwata halved his salary after the failure of the Wii U.
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This is just one of the many brutal rounds of layoffs we’ve seen this year. 700 people were laid off from Electronic Arts. Bioware laid off 50 people working on Dragon Age: Dreadwolf, including several senior writers and creators of iconic characters. Over 1,000 people at Microsoft were laid off, with 343 and Bethesda taking the brunt of the damage. Unity has had mass layoffs, as have Firaxis, Niantic, Take-Two, CD Projekt Red, and Riot. Embracer Group, which until now has been acquiring studios with fervour, recently had a $2 billion deal fall through and is restructuring its organisation.
And just yesterday, it was announced thatSega had cancelled Hyenas, which editor-in-chief Stacey Henley described as “a game that began life on a whiteboard, on a pie chart, on a spreadsheet. It came into the world not as an idea, kicking and screaming and gasping for breath, but as lifeless numbers, calculated coldly to generate profit”. It was ultimately cancelled because of the “lower profitability of the European region”, most likely referencing the tighter regulations on mechanics such as loot boxes. Already, developer Creative Assembly is preparing for layoffs.
It’s not like the economy is so shitty that corporations are suffering and can’t survive. What’s happening is that big conglomerations, driven by the desire to make as much profit as humanly possible, are buying up studios at a breakneck pace despite the patent unsustainability of doing so. They are getting studios to follow industry trends to make games to generate maximum profit in the minimum time-frame. They are snatching up everything they can in boom periods just to callously fire huge chunks of their workforce when they realise that indiscriminately purchasing everything they lay eyes on isn’t actually a solid profit-making strategy.
What exactly did Tim Sweeney expect? Spending more money than you earn isn’t a sustainable business strategy, and now, nearly a thousand people are unexpectedly jobless and scrambling to survive. What’s even more unsettling is that as the game industry tries to band together, all it can do is tell laid-off employees that there are vacancies at their equally big companies. Of course, it’s a good thing that developers are trying to help each other out, but the reality is that many of these studios are hiring unsustainably as well. The cycle repeats, month after month, year after year. Companies overextend themselves, thinking the eventual profit will tide them through, and it’s never enough. Eventually, the bubble bursts. People get laid off and move to another company, and it happens all over again.
Companies need to stop chasing unsustainable growth in the name of seeing an ever-increasing net profit figure on a spreadsheet. It feels unbelievably cruel that these people, some of whom have given years of their lives to these companies, are being let go on the whims of C-suite executives who make millions of dollars a year and don’t care about the people who work for them. Companies cannot keep treating workers like this, setting arbitrary growth benchmarks and firing people when they don’t reach them. Something has to change, and fast.2023 has been a great year for games, and a horrible year for the industry. It won’t get better if these companies keep perpetuating the same old cycle.
Next:Hyenas' Cancellation Needs To Be A Wake Up Call For The Industry
