Epic Games’ Messy Bandcamp Sale Ends With Mass Layoffs [Update]

“Music is healing,” the late musician Prince once said. Bandcamp co-founder Ethan Diamond told NPR in 2020 that the point of the independent digital music platform he was building was to bring that power of healing to everyone. Many current Bandcamp employees are going to need it. Epic Games, which acquired Bandcamp just a year ago, laid off roughly half its staff today after finalizing its sale to music licensing company Songtradr amid wide-scale cuts at the Fortnite maker. One former employee told Kotaku that nobody’s heard from Diamond since the sale was announced.

“Over the past few years the operating costs of Bandcamp have significantly increased,” Songtradr wrote in a statement. “It required some adjustments to ensure a sustainable and healthy company that can serve its community of artists and fans. After a comprehensive evaluation, including the importance of roles for smooth business operations and pre existing functions at Songtradr, 50% of Bandcamp employees have accepted offers to join Songtradr.”

The rest of the roughly 120 employees will be laid off by Epic and receive six months of severance, even as Bandcamp’s union continues to bargain with the billion-dollar company over better terms. Epic Games bought Bandcamp in March 2022 for $US273 million, according to internal documents viewed by Kotaku. According to two former employees, who wished to remain anonymous because they did not want to jeopardize their severance packages, even Diamond was not aware of Epic’s plan to sell Bandcamp to Songtradr until as soon as the night before the deal was announced.

Diamond did not respond to a request for comment sent to his Bandcamp email address over a week ago (it has since been disconnected). Epic declined to comment on whether Diamond was aware of the deal to sell Bandcamp before it happened.

Epic Games announced it would divest itself of Bandcamp in a September 28 blog post that revealed roughly 830 layoffs across the wider company. Employees of the independent music platform, which has been an especially popular place for fans to buy from and support video game composers directly, were left in limbo in the weeks that followed as to whether they would have a job at Songtradr once the sale was complete.

Two former employees said they were immediately logged out of Epic’s company-wide Slack channel once the deal was announced on September 28, despite still being on the company’s payrolls until it officially closed. They also claimed that a majority of the staff had lost access and permissions to the tools needed to perform their regular duties in that time, grinding everything but critical functions within Bandcamp to a halt as staff waited to see who would be laid off.

During the weeks that followed, Bandcamp’s union, which represented about half of the company at the time, called on Songtradr to voluntarily recognize the union while it also negotiated with Epic over how the layoffs to union members would be handled. For example, the game publisher said that no employee who received an offer from Songtradr would remain eligible for Epic’s severance package. They would effectively be forced to take the job at the new company, despite the massive changes to conditions on the ground with Bandcamp being cut roughly in half.

“There’s no way Bandcamp will continue as Songtradr has promised,” one former employee told Kotaku earlier this month. “It’s just completely fucked up.”

The chaotic transfer of ownership and the confusion among staff was due in large part to the nature of the deal between Epic and Songtradr. The two companies agreed to an “asset sale” of Bandcamp rather than a “stock sale.” This meant that Songtradr was only acquiring the technology and platform, rather than the company as a whole, including its staff. As employees waited for the deal to close, many were left in the dark about what was going on and who would ultimately still have a job when the dust eventually settled. According to two former employees, neither Epic CEO Tim Sweeney, nor anyone else on Epic’s senior leadership team, ever held an all-hands meeting with Bandcamp staff where they could ask questions.

The sudden, unexpected purchase of Bandcamp in 2022 and its messy sell-off this month have drawn criticism from many supporters of the platform. “We share a vision of building the most open, artist-friendly ecosystem in the world,” Epic Games wrote at the time of the original acquisition. “The fact that Epic sold bandcamp a year after they bought it shows that they had no plan and no real interest in bandcamp’s mission,” tweeted FTL: Faster Than Light composer Ben Prunty.

It’s not clear what will happen to Bandcamp going forward. ”We are committed to keeping the existing Bandcamp services that fans and artists love, including its artist-first revenue share, Bandcamp Fridays and Bandcamp Daily,” it said in a statement to Kotaku today. Epic will continue to work with Bandcamp on Fortnite Radio and remains an investor in Songtradr.

According to two former Bandcamp employees, those who were laid off were disproportionately from the union. “Songtradr had no access to union membership information and we executed our employment offer process with full-consideration of all legal requirements,” a spokesperson for Songtradr told Kotaku. They said final offers were sent out after a careful evaluation and examination of “several factors.”

Update 10/17/2023 12:12 p.m. ET: Bandcamp’s Union called the layoffs “heartbreaking” and said it would continue negotiating with Epic Games over better severance terms.

“Today, Epic Games’ sale of Bandcamp to Songtradr was closed and at least half of Bandcamp’s staff was alid off,” Bandcamp United wrote in a statement. “This is heartbreaking. We love our jobs, the platform we’ve built, and the Bandcamp community. We’re glad we have our union—coworkers who have each other’s backs. We’ll be moving together to decide what our next steps are. On Wenesday we return to the bargaining table with Epic Games, and we’ll keep you updated. Love and solidarity to the whole Bandcamp community. Thank you for your support.”

Songtradr, meanwhile, has still refused to recognize the union. “At this moment we don’t have an update on that, however, we will update you when new information becomes available,” a spokesperson told Kotaku.

Update 10/17/2023 5:46 p.m. ET: A new statement from the Bandcamp United confirms that union members were an overwhelming portion of the layoffs. “Of those laid off, 40 were in the union bargaining unit out of a total 67 members,” it wrote. “None of the eight (8) democratically elected bargaining team members received a job offer. We are heartbroken to see our community shattered so callously, and are very upset to see that no one in our collective bargaining committee was offered a position at Songtradr’s Bandcamp. There was no transparency on how these job offers were distributed.”

A former support team employee, Ed Blair, said, “We continue to fight for the future of Bandcamp but it is tremendously disappointing to see Epic and Songtradr discard that work, and our unit’s democratically elected leaders.”