Epic Games has announced it is laying off roughly 16 percent of its workforce, resulting in around 830 employees losing their jobs.

In a statement posted by Epic president Tim Sweeney, he explains the layoffs as a cost-cutting measure that will include divesting Bandcamp, which it acquired last year, and spinning off advertising platform SuperAwesome into an independent company. Epic had acquired SuperAwesome in 2020. 250 people will be leaving Epic as a result of these divestitures. 

“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 writes in his statement. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”

Sweeney then explains that despite taking steps to reduce costs, such as scaling back on marketing and events, Epic still fell short of achieving financial stability and that layoffs were the only solution. Sweeney states that two-thirds of the terminations come from teams outside of core development and that these departures will not come at the expense of game development or lines of business. Sweeney also says this will be the only round of layoffs and that Epic will still be hiring for “critical roles.” Development of content for titles such as Fortnite, Fall Guys, and Rocket League will continue as planned. 

Impacted employees will receive severance packages of six months of base pay and six months of Epic-paid healthcare for workers based in the U.S., Canada, and Brazil. Epic will offer workers the option to accelerate stock options vesting schedules through the end of 2024 while adding two extra years from today to use these options. U.S. employees can also vest any unearned profit sharing from their 401k. Lastly, Epic will provide career transition services and Visa support.

A big company meeting is scheduled for next month to discuss the company’s efforts and priorities. These layoffs come just a few weeks after Epic’s Chief Creative Officer and Fortnite head Donald Mustard announced his retirement.