Just days after new Disney CEO Josh D’Amaro touted the company’s partnership with Epic Games, the video game brand has announced that it will lay off 1,000 employees. In 2024, then-Disney CEO Bob Iger announced that the company had invested $1.5 billion in Epic, acquiring a minority stake in the studio best known for the game Fortnite.Epic Games LayoffsCredit: Epic GamesOn March 24, Epic Games CEO Tim Sweeney sent a digital memo to all employees confirming that the company planned to cut 1,000 jobs. Sweeney explained that Fortnite had seen a major downturn in engagement in 2025, leading to Epic “significantly more than we’re making.”EPIC GAMES LAYS OFF OVER 1,000 EMPLOYEES“Today we’re laying off over 1000 Epic employees. I’m sorry we’re here again. The downturn in Fortnite engagement that started in 2025 means we’re spending significantly more than we’re making, and we have to make major cuts to keep the company funded. This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place.”EPIC GAMES LAYS OFF OVER 1,000 EMPLOYEES"Today we’re laying off over 1000 Epic employees. I'm sorry we're here again. The downturn in Fortnite engagement that started in 2025 means we're spending significantly more than we're making, and we have to make major cuts to keep the… pic.twitter.com/Ibrsl1IFn3— HYPEX (@HYPEX) March 24, 2026Those who lose their jobs will receive a severance package including four+ months of base pay (based on tenure), six months of Epic-paid healthcare coverage in the United States, accelerated stock option vesting through January 2027, and an extended equity exercise window of up to two years.In addition to the layoffs, Epic Games has removed several open roles and contracting positions and cut marketing budgets. Sweeney says that these efforts put the studio “in a more stable place.”Credit: Epic GamesAlthough Epic Games and The Walt Disney Company have both experimented with generative AI, Sweeney noted that the layoffs were not related to plans to use AI to generate game content.“I should note that the layoffs aren’t related to AI,” he wrote. “To the extent it improves productivity, we want to have as many awesome developers developing great content and tech as we can.”Epic Games plans to accelerate the release of seasonal and fresh content for Fortnite, hoping to encourage consumers to spend more on the game. The company will also improve conditions for developers, moving from Unreal Engine 5 and UEFN toward Unreal Engine 6. Sweeney said the company has “huge launch plans towards the end of the year.”Disney and EpicCredit: Epic GamesIn February 2024, The Walt Disney Company invested $1.5 billion into Epic Games, hoping to incorporate its entertainment and theme park properties into Fortnite. Josh D’Amaro, who took over as Disney CEO last week, has singled out the partnership as one of the most significant things he worked on in his previous role, saying it “will redefine how fans play, create, and connect with Disney stories.”So far, The Walt Disney Company and Josh D’Amaro have not commented publicly on the layoffs at Epic.What do you think about The Walt Disney Company’s minority stake in Epic Games? Share your opinion with Inside the Magic in the comments! The post 1,000 People Lose Their Jobs After Disney Acquires $1.5 Billion Stake in Entertainment Company appeared first on Inside the Magic.