Disney Scraps its Metaverse Division in Cost-Cutting Measure
Disney is doing away with its metaverse division as part of its cost-cutting measures. The company is set to begin staff layoffs this week.
Disney joined the metaverse wave following Facebook’s rebranding to Meta which sparked widespread interest in the new technological frontier. Disney formed a division, the Next Generation Storytelling & Consumer Experiences unit which employed 50 staff. With the looing layoffs, all staff at the unit have now become redundant. However, the Wall Street Journal (WSJ) reported that the unit’s head Mike White would stay on at Disney in a different capacity that is yet to be revealed.
Disney’s metaverse unit was formed by former company CEO Bob Chapek and was charged with developing the company’s metaverse strategy. In a memo at the time, Chapek had told Disney employees that the unit’s task would be to connect “the physical and digital worlds” for Disney entertainment.
The WSJ is now reporting that all 50 employees working in the unit were laid off.
Disney never quite clearly defined what it wanted to do with the metaverse division. In a 2021 earnings call, Disney said it was developing “unparalleled opportunities” by leveraging the metaverse that would enable consumers to engage with its products and platforms.
It described its early metaverse foray as a prologue in preparation for the right moment when the physical and digital worlds would be connected via the Disney metaverse to unlock new and boundless storytelling media.
The former Disney boss Chapek was replaced by Bob Iger in late 2022.
Disney initially announced the latest spate of layoffs in February. The layoffs, part of the company’s restructuring, will affect some 7,000 employees and will cut across the company. Also affected include Disney’s distribution and media division, resorts, parks, and ESPN.
Iger has been restructuring the company following his return to the helm. These layoffs are part of the company’s reorganization and are aimed at curtailing Disney’s corporate spending and unlocking cash flow.
Last month, Disney disclosed that it was aiming to cut costs to the tune of $5.5 billion with content spending accounting for $3 billion of the spending cuts.
Disney’s annual shareholder meeting takes place on April 3rd.