Epic Games Lays Off 800+ Employees as Apple Legal Battle Continues

Fortnite publisher Epic Games is laying off 830 employees, which accounts for approximately 16% of its workforce. The layoffs come in the midst of Epic’s legal battle with Apple which has been ongoing since 2020.

In a memo sent to the developer’s employees and shared on the company’s website, Epic CEO Tim Sweeney said that the company has been “spending way more money” than it brings in to continue Fortnite’s growth. Sweeney also said other cost-cutting efforts have “ended up far short of financial sustainability.”

Sweeney said that the only way to stabilize Epic’s finances is via layoffs. Employees will receive severance, including six months of base pay, as well as six months of paid healthcare.

The layoffs come as Epic continues to wage a war with Apple in the courts. On Wednesday, Epic filed a petition for a writ of certiorari with the Supreme Court, asking the court to weigh in on its ongoing legal battle with Apple.

The request comes following two major in-court losses for Epic, and God only knows how many hundreds of thousands or more it has spent on legal fees.

Epic’s lengthy court battle with Apple is over the 30% cut of the action Apple takes of Fortnite players’ in-game purchases of goods such as digital skins on the iOS platform. Epic has attempted to paint Apple’s App Store rules as monopolistic after Apple kicked Fortnite out of the App Store for violating the terms of its developer agreement.

The result was that iPhone and iPad users who wanted to play the game were forced to do so on other platforms — a change that Epic claims has cost it 60% of its users. While Apple has made it clear that Fortnite can return to the App Store any time that Epic decides to abide by Apple’s rules, the game developer has instead been trying to get the courts to order Apple to let it back in on Epic’s terms. However, the courts have repeatedly ruled that Epic has no one to blame but itself for the situation.

Nevertheless, Fortnite has managed to find its way back onto the iPhone via web-based game streaming services like Nvidia’s GeForce NOW and Microsoft’s Xbox Cloud Gaming.

Sweeney says Epic Games is working to cut down on legal expenses, although the court battles will continue so the “metaverse can thrive and bring opportunity to Epic and all other developers.”

The Supreme Court filing is a last-ditch effort for Epic, following an appeal that was turned down in April of this year by the Ninth Circuit Court of Appeals. The Ninth Circuit agreed with a lower court decision that said Apple’s App Store rules that prohibit third-party marketplaces do not violate the government’s antitrust laws.

Epic has waged its legal battle since 2020, hoping for a ruling that would allow it to get around App Store rules and offer its apps and in-app purchases through sideloading or its own app store setup. It all comes down to Epic not wanting to allow Apple to wet its beak to the tune of 30% of in-app sales.

Epic’s lengthy 488-page filing with the Supremes includes several reasons why the court should hear the case, including errors made by lower courts. Epic also says the case is significant as a ruling in its favor could affect thousands upon thousands of other App Store developers.

In upholding the lower court’s ruling, the Ninth Circuit Court of Appeals also upheld the appeals court’s mandate that would force Apple to allow developers to direct their customers to purchase options away from the App Store. Apple is reluctant to make those changes, which could lead to the Cupertino firm requesting the high court to hear that portion of the case.

It remains to be seen whether the Supreme Court will decide to hear the case, as it accepts only a tiny number of the cases it is asked to review each year.