Epic Games announced it will lay off more than 1,000 workers across the company as the video game maker faces declining engagement with its blockbuster title Fortnite. The cuts represent the second major round of layoffs in recent years for the company behind the popular battle royale game.

According to multiple reports, Epic Games CEO Tim Sweeney indicated the layoffs are not related to artificial intelligence implementation but rather reflect ongoing struggles to maintain player engagement with Fortnite. The game, which became a cultural phenomenon and major revenue driver for Epic, has seen usage fall in recent periods.

The company has also increased the price of V-Bucks, Fortnite's in-game virtual currency, as it seeks to address financial pressures. Epic Games has built much of its business model around Fortnite's free-to-play structure supported by microtransactions and cosmetic purchases.

The layoffs highlight broader challenges facing the gaming industry as companies that experienced rapid growth during the pandemic now confront changing player habits and market conditions. Epic Games previously conducted significant workforce reductions as it worked to adjust its operations to evolving market dynamics.

Founded in 1991, Epic Games became one of the most valuable private companies in the gaming sector largely due to Fortnite's massive success. The company also operates the Unreal Engine, widely used by other game developers, and has been involved in high-profile legal battles with Apple and Google over app store policies.