(Reuters) -"Fortnite" maker Epic Games is laying off about 830 employees, or 16% of its staff, and divesting online music platform Bandcamp, the company said on Thursday.
The videogame company will also spin-off most of SuperAwesome, which Epic Games acquired in 2020. SuperAwesome is a platform for developers to include kid-safety tools in their products.
"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," CEO Tim Sweeney said in an email to employees.
Sweeney said that about two-thirds of the layoffs were outside of core development teams and that the cuts would help the company "get to the other side of profitability."
The videogame industry is struggling with a slowdown in spending as inflation-weary gamers become more selective in picking popular titles.
Legacy videogame publishers have also been fighting for top spots with new entrants like Warner Bros Discovery (NASDAQ:WBD), whose "Harry Potter"-based game "Hogwarts Legacy" was a major hit.
Epic has been in a legal battle with Apple (NASDAQ:AAPL) since 2020, when the gaming firm alleged that Apple's practice of charging up to 30% commissions on in-app payments on iPhones and other devices violated U.S. antitrust rules.
Apple on Thursday asked the U.S. Supreme Court to strike down an order requiring changes to its App Store rules stemming from the antitrust case.