UPDATE 4.54pm: Epic has confirmed reports of widespread layoffs at the company, saying the move will affect "around 830 employees", with approximately two-thirds of those job cuts said to be in teams "outside of core development".

Around 250 employees will leave the company as a result of Epic's newly announced divestiture of Bandcamp and SuperAwesome.

"For a while now," Epic CEO Tim Sweeney wrote in an all-staff email now shared on the company's website, "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. I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.

"While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business than we had when Fortnite Battle Royale took off and began funding our expansion. Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics."

Sweeney adds that the company has been "making ongoing efforts to reduce costs" globally, including "moving to net zero hiring and cutting operating spend on things like marketing and events", but it remains "far short of financial sustainability". Sweeney insists that "doing [layoffs] now and on this scale will stabilise our finances."

All workers affected by today's job cuts will receive six months base pay as part of their severance package, alongside six months of Epic-paid healthcare in the US, Canada, and Brazil. "We're offering to accelerate people's stock option vesting schedule through the end of 2024 and are giving two additional years from today to exercise the options," Sweeney adds. "In the US we're also offering to vest any unearned profit sharing from their 401k. And we'll provide benefits including career transition services and visa support where we can."

Epic insists no more layoffs will occur beyond the 830 announced today, saying "these changes financially stabilise the business".

In light of today's job cuts, Epic says it will prioritise work on the next Fortnite Season and Fortnite Chapter 5, as well as "Del Mar, Sparks, and Juno" - Del Mar and Juno are rumoured to be the codenames for a Fortnite car racing mode and Fortnite Lego collaboration respectively.

An FAQ accompanying Sweeney's post says Epic is "continuing to invest in games with Fortnite first-party development, the Fortnite creator ecosystem and economy, Rocket League and Fall Guys; and services for developers including Unreal Engine for games and enterprise, Epic Games Store, Epic Games Publishing, Epic Online Services, Kids Web Services, MetaHuman, Twin Motion, Quixel Mega Scans, Capturing Reality, ArtStation, Sketchfab and Fab."

ORIGINAL STORY 4.20pm: Fornite maker Epic Games is reportedly laying off around 900 employees according to Bloomberg - a number said to equate to roughly 16% of it total workforce.

Citing a "person familiar with the matter", Bloomberg says employees were informed of the significant job cuts in a "memo to staff".

Epic is yet to publicly respond to Bloomberg's report but Eurogamer has contacted the company for comment and will update the story as more information is shared.

Today's news comes in a year that has seen substantial layoffs across the games industry. Microsoft, Take-Two, Riot Games, EA, Twitch, Meta, Unity, Ubisoft, CD Projekt, Roblox, Embracer, Amazon, and Sega - which today confirmed more potential redundancies following the cancellation of Creative Assembly's Hyenas - have all announced job cuts in 2023.