Often when I see layoffs like this, I can't help but think "Wow that company has so many employees and yet, in practice, does so little". This perhaps a rather uncharitable sentiment, but I can't help but have it.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)
> "Wow that company has so many employees and yet, in practice, does so little"
Some of it is real need for things like support, payments, and compliance in a bunch of languages and jurisdictions and across a bunch of platforms and combinations of platforms.
A lot of it's just that large businesses tend to be shockingly inefficient, often taking literally many hundreds of person-hours to do things that a small company or small team might do in low-tens. Coordination costs are high, processes are often really bad in ways that nobody who could fix them is empowered to, serious principal-agent problems are the norm rather than the exception, et c.
One of the weirdest things to me about the AI craze is that I don't see how it fixes organizational problems, and most big orgs are already burning more cash on waste due to those than they could possibly gain from fairly-optimistic LLM gains. Like, if they wanted to 5x development speed, they already can without a single LLM involved, by managing better. They could have done that ten years ago. All the more wild that they're flipping out over LLMs. You can't even come close to efficiently organizing the resources you already have...
> if they wanted to 5x development speed, they already can without a single LLM involved, by managing better.
True, but leaders of large organizations always want to fix inefficiencies and presumably failing to. Kinda like saying "if humans stopped fighting wars, most of them would have better quality of life" -- people whose life quality is better at peacetime are already trying to avoid wars, and there's not much more they can do.
OTOH, AI is a practical step a CTO (or CEO or Board or whoever) can take to make the company more efficient (assuming the hype works out).
TLDR the beauracracy is by design, in part to preserve what jobs are there, and in part to dilllute accountability when it comes up. You can see how these two factors can lead to a negative feedback loop of inefficiencies, where CYA is more important than actual productivity.
Nanite is a good counterexample, very impressive and innovative technology. Even more impressive that they released the technical details instead of going the software patent route. I think trying to leverage the war chest to go after Steam's monopoly was exactly the type of adventurous plan you are talking about, the safe play would have been to make minimal investments and continue churning out games hoping for another big hit.
Lumen, Nanite, Substrate, Metahumans, and Chaos Physics all come to mind as major innovations driven by Epic. Nanite specifically has pretty much no alternatives. Additionally, the developer UX on UE5 gets better from release to release - for instance, being able to recompile your logic or animations while actively running the game is pretty insane.
I suspect the way you get to that size is having a team of 5 people doing X for Fortnite going "man, we could do our specific job a bit better if we has 7 people." Scale that to a whole corp.
Each job is justified in isolation to do a specific thing, at least at the hiring time. I suspect there aren't a lot of people thinking at a high level as you are "we have this many gajillion dollars - what are we betting on?"
Also as you get bigger you need more and more "glue" people, HR, accounting, etc. A five-man team can avoid all that, but you can't take them to 25 and have 5 5-people teams anymore. Some amount is just management.
> They could be funding many experiments and seek to have another hit like Fortnite
Remember that their success came from abandoning their original zombie game idea, and copying ideas from the new battle royale genre. With more polish, of course.
Why the good god do so many people care if business is effcient. If businesses were maximally efficient we'd all be starving to death or working at red line hanging on by a thread with no slack at a job to avoid staving to death, while like 5000 people live like gods.
1. More efficiencies makes for more quality products, and opens up opportunities for more initiatives which will also be higher quality than usual.
2. More efficiencies means companies become super leannin order to minimize labor and maximize costs, focusing on a few select profit centers.
I guess you fall under #2. Both are correct, depending on the economy. So you're rightm for now. #1 was the trend last decade despite horrible inefficiencies.
I don't think so. My experience at inefficient companies is not "Wow I have a lot of freetime." It's "Wow my day is completely taken up by useless bullshit that prevented me from getting anything of value done".
I think there's a good deal of wiggle room between being worked to death and teaching a manager that makes more than you how Jira works for the 10th time.
Yes, Unreal Engine keeps getting improved, more Fortnite content gets produced. But there is a general lack of innovation, one that I find personally painful when I look at Epic's recent-ish track record. Needing to fire this many employees is not just a result of market conditions, but also a straightforward consequence of not being able to leverage them for sufficiently lucrative outcomes.
Companies with this amount of capital are well positioned to take multiple strategic bets which aren't at all safe bets, but pose no real financial risk for the company in aggregate. Why do these bets end up being taken instead by indies with much more to lose? Well, partly because indies often _need_ to take riskier bets to carve a niche. But the other side of the coin is, what I can only surmise, a lack of imagination and adventurousness on the part of management. They could be funding many experiments and seek to have another hit like Fortnite, perhaps in a somewhat different market. Having to seek another hit while your finances are declining is less pleasant.
When a company loses its edge in this way, as long as it hasn't _really_ captured a demographic or created some very sticky ecosystem, it's bound to get whittled down repeatedly. I doubt that Epic will suddenly get more creative and adventurous at this point, but perhaps necessity will have its part to play.
(Aside from all of that, I agree with most commenters here that the layoff is being handled about as gracefully as one could reasonably hope.)