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Disney Cuts Metaverse Division as Part of Broader Restructuring 2023

Disney Cuts Metaverse Division as Part of Broader Restructuring 2023

April 15, 2023 07:11
Disney Cuts Metaverse Division as Part of Broader Restructuring 2023



Disney Cuts Metaverse Division As Part of Broader Restructuring

Disney announced on January 18 that as part of their restructuring plan they are closing down their metaverse division, which was formed in 2022 to explore new technologies using Disney’s extensive library of intellectual property. As a result of these plans 7,000 workers will be laid off.

Disney Cuts Metaverse Division

Disney Cuts Metaverse Division

Bob Chapek, former CEO of Disney, appointed Mike White to head their team in February 2022, but its existence was short lived and lackluster. Tech users showed little enthusiasm for using Oculus headsets or the Metaverse; although billions were invested into such technology.

CEO Bob Iger explains

Disney CEO Bob Iger informed employees in a memo sent out last week of the company’s restructuring plans, including cutting the metaverse division as part of an overall restructuring effort. Iger stated that initial layoffs will begin this week to reduce workforce by 7,000 and save an estimated $5.5 billion.

Chapek initiated the metaverse division with a mission of developing new technology that could bring stories to life in ways never possible before, and help customers create a single avatar to access various digital worlds and experiences.

Iger may only have been back at the company for a short while, yet already he’s making significant changes. He refocused the company around three core divisions – Disney Entertainment, ESPN and parks and experiences — while searching for Fox assets to bolster those areas.

Disney, like other big tech companies, is facing increasing pressure to reduce costs and drop expensive projects that don’t generate immediate revenue. Accordingly, reports indicate it will close down Chapek’s metaverse division – another cost cutting measure Iger has been undertaking since returning to Disney.

Disney is cutting jobs

Disney, in an effort to reduce costs and streamline operations, is taking steps towards streamlining their operations by disbanding a division that researched metaverse technology as part of a broad restructuring plan that will reduce employee headcount across their operations.

The metaverse, which allows users to interact through avatars, was once seen as an exciting technology that could help companies tell more engaging narratives. Unfortunately, its effectiveness has come under criticism as more of a gimmick than an effective tool, and may now be giving way to artificial intelligence technologies like Watson.

Variety reports that Disney has eliminated their metaverse division as part of a cost-cutting initiative. Led by Mike White, this division explored new methods of telling stories using technological formats within Disney’s vast catalog of intellectual property.

Disney CEO Bob Iger announced in February that as part of a larger restructuring plan, his company would reduce employment by 7,000 jobs as part of a restructuring plan. Iger stated that workers affected would first be informed this week; second round layoffs will occur during April; while final ones before summer commence are to occur before that. CNBC reports.

Disney’s reduction of its metaverse division may signal that they are reconsidering their approach to this technology and may instead shift focus onto other areas of development. At this stage, it remains too soon to say whether other tech firms will follow suit by disbanding their metaverse teams.

Disney Metaverse

The Walt Disney Company has reportedly discontinued its metaverse division as part of a comprehensive restructuring that will see 7,000 jobs cut, according to reports in The Wall Street Journal. This 50-person team had been set up as the entryway into metaverse entertainment.

According to Mike White’s report, his team was charged with finding ways to tell interactive stories using Disney’s library of intellectual property. Additionally, they researched applications for fantasy sports leagues, theme park attractions, and consumer experiences.

Bob Chapek, former CEO at Disney, saw it as his personal mission to explore “next generation storytelling”.

After closing its division, Disney has made no indication of when or if it will enter the metaverse; their unwillingness reflects efforts that weren’t as successful compared to those from other companies.

Metaverse enthusiasts were left heartbroken at hearing of this news, as numerous major projects from companies like Facebook and Tencent had fallen by the wayside.

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