Disney cuts metaverse division as part of broader restructuring
Walt Disney Co. has eliminated its metaverse division as part of staff cuts that promise to reduce head count by around 7,000 across the company over the next two months, reports The Wall Street Journal.
CEO Bob Iger said Monday that those layoffs would begin this week. Disney's next-generation storytelling and consumer experiences unit, the small division that was developing metaverse strategies, looks like it's one of the first to go.
The metaverse division is headed by Mike White, who was promoted to the role from SVP of consumer experiences and platforms in February 2022 and charged with getting Disney deeper into the web3 space. The unit aimed to find ways to tell more interactive stories in immersive formats using Disney's extensive library of intellectual property, according to WSJ. Aside from the Disney we all know and love, that extensive library includes Pixar, Marvel and all of the Star Wars movies and shows.
All 50 or so members of the team have lost their jobs, sources told WSJ. White will remain at the company, but it's not clear in what capacity.
The company could not be reached for comment.
Disney's former CEO, Bob Chapek, brought White on last year with the goal of creating "an entirely new paradigm for how audiences experience and engage with our stories," according to an internal memo. Chapek also described the metaverse as "the next great storytelling frontier" and a "perfect place to pursue our strategic pillars of storytelling excellence, innovation and audience focus."
The hiring of White and the creation of the new metaverse unit came a few months after Facebook rebranded to Meta in an attempt to identify with the futuristic technology into which CEO Mark Zuckerberg had been pouring billions of dollars.
Iger took over for Chapek in November and, despite recent developments, seems to be bullish on the metaverse. He invested in and joined the board of Genies Inc. last year, a startup that lets users create online avatars for use in metaverse applications.
The metaverse is still many years from going mainstream, which has frustrated many big tech companies that invested large sums on new entertainment formats. Despite Meta's billions spent on the Oculus headset and building out the metaverse, there has been low user demand and general confusion among users about how to use the new technology for anything but gaming.
Last month, Disney said it would make $5.5 billion in cuts and cut 7,000 jobs as part of a broader restructuring. Like many other large conglomerates, Disney is feeling the pressure to bring costs down, and that often means cutting out expensive moonshot projects that aren't bringing in any near-term revenue.
It's not yet clear if Disney will continue to work on metaverse applications via other teams, since it's a long-term bet. Zuckerberg has repeatedly asked investors to trust him, be patient and play the long game.