Disney's Metaverse Division Disbanded Amid Major Restructuring
Disney has reportedly dissolved its metaverse division as part of a larger restructuring effort to cut operating costs by $5.5 billion and lay off 7,000 employees, amid challenging economic conditions and increased competition in the streaming sector.
Disney has reportedly disbanded its metaverse division as part of a wider restructuring plan aimed at reducing operating expenses by $5.5 billion and laying off 7,000 employees over the next two months. The Wall Street Journal (WSJ) shared this news on March 28, citing sources familiar with the situation.
The metaverse division, which consisted of around 50 members, was created in February 2022 to develop new ways for audiences to engage with Disney stories. However, all members will now be left without new employment contracts, except for Michael White, who led the broader consumer products unit, according to the WSJ.
In December 2021, Disney patented a "virtual-world simulator" designed to provide headset-free augmented reality (AR) attractions at its theme parks. The company had also explored the possibility of integrating metaverse technology into sports betting, though this idea never came to fruition.
The decision to reduce operating expenses and staff numbers followed a consultation with McKinsey & Company to identify cost-cutting opportunities. Adverse economic conditions and increased competition in the streaming sector were cited as the main reasons for the decision.
Both former and current Disney CEOs, Bob Chapek and Robert Iger, once viewed the metaverse as a promising investment opportunity. Chapek had described the metaverse as "the next great storytelling frontier," while Iger had previously served as a director and adviser for Genies, a digital avatar platform operating on Dapper Labs' Flow blockchain.
