Epic reportedly mandates full AI workflows to ship delayed Disney game after 1,000 layoffs

Epic Games has told employees that its in-development game with Disney, a project featuring Marvel and Star Wars characters, will now be finished with AI doing the heavy lifting, according to a Bloomberg report relayed by AV Club. At an announcement last week, company leadership reportedly said there would be "no more hand-written code" and that the title would be "generated with full AI workflows."

A delay that follows deep cuts

The directive lands months into a difficult stretch for the company. In March, Epic laid off 1,000 employees in a cost-cutting round that reports tied to a downturn in Fortnite engagement. The Disney collaboration had been slated for a March release, but Bloomberg reports that Epic underestimated how many people the project would actually require. The game is now delayed, and internally it is being run as an "AI first" project.

As AV Club points out, the workers cut in March were, in effect, the people needed to build the projects meant to lift engagement in the first place. The AI mandate reads as an attempt to close the capacity gap left by those departures.

Staff were caught off guard

According to the report, the reaction inside Epic was disbelief. Employees who heard the "no more hand-written code" message were reportedly stunned, and many initially hoped it was some kind of joke — a measure of how far outside expectations the policy landed. These are teams that have kept working through a year in which they lost hundreds of colleagues.

Epic itself confirmed the new direction. A company spokesperson told Bloomberg: "We're embracing AI-accelerated development, led by Epic developers who are the visionaries and creative drivers for everything we do." The phrasing frames the shift as developers being amplified by AI rather than replaced by it, though the reported internal response suggests staff do not read it that way.

Disney is staying quiet

Disney declined to comment for Bloomberg's story, so it is unclear how the holder of the underlying IP feels about a marquee Marvel and Star Wars title being produced this way. AV Club notes, however, that Disney has shown an appetite for AI before: less than a year ago the company was enthusiastic about bringing user-generated AI content to the Disney+ app. That effort, associated with OpenAI's Sora, is no longer active — AV Club says the deal is dead — but it set a precedent for how the company is willing to let its most valuable characters be handled.

Why it matters

A major studio cutting a thousand staff and then declaring that a flagship, IP-licensed game will be produced through "full AI workflows" is a concrete data point in the debate over AI and game-industry employment. For years the question has been mostly theoretical: whether AI would supplement developers or substitute for them. Epic's move points to a third pattern emerging at scale — shrink the workforce first, then restructure the remaining production pipeline around AI to absorb the gap.

The stakes extend beyond one company. If a Disney-backed title built this way ships successfully — or visibly stumbles — it will influence how other large studios staff and schedule their biggest projects. It also puts Epic, which sells the Unreal Engine toolchain used across the industry, in the unusual position of demonstrating for its own customers what an AI-first pipeline looks like in practice. And the reported morale hit raises a quieter question: whether studios can retain the senior engineers such workflows still ultimately depend on, once hand-written code is no longer part of the job description.