Epic Games is set to axe around 16 percent of its workforce.
The video game company - which makes the money-spinning franchise 'Fortnite' - has announced plans to axe jobs as part of a broader cost-cutting drive.
CEO Tim Sweeney said in a statement: "We concluded that layoffs are the only way, and that doing them now and on this scale will stabilise our finances.
"Epic folks around the world have been making ongoing efforts to reduce costs, including moving to net zero hiring and cutting operating spend on things like marketing and events. But we still ended up far short of financial sustainability."
Sweeney admits that it's tough to lay-off so many members of staff.
However, he's insisted that the company is doing everything it can to support its staff, given the circumstances.
Sweeney said: "Saying goodbye to people who have helped build Epic is a terrible experience for all.
"The consolation is that we're adequately funded to support laid off employees: we’re offering a severance package that includes six months base pay and in the US/Canada/Brazil six months of Epic-paid healthcare. 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.
"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."
Sweeney also remains positive about the company's long-term prospects.
He explained: "Epic’s prospects for the future are strong.
"We have amazing game experiences across multiple platforms. We’ve built the best engine in the world, and will be hosting Unreal Fest next week to bring the community together and spotlight the things they are building with Unreal Engine and UEFN."
