Disney axes its metaverse unit, plans to slash headcount by 7,000

Disney is retreating from its metaverse strategy. After announcing 5,5 billion cutbacks, the company plans to axe headcount by up to 7,000.

Disney layoffs

The Walt Disney Company slashed its storytelling and customer experience division, according to the report from The Wall Street Journal, citing unnamed “insiders” familiar with the situation. The move is part of a bigger layoff plan to reduce headcount by as much as 7,000 in the next two months.

The 50-strong unit was tasked with designing interactive narratives for new technological formats. This included developing strategies for the metaverse, leveraging Disney’s extensive intellectual property resources. The department was headed by Mike White, an ex-consumer products executive, who will remain in the company in a new role, yet to be disclosed.

White, unavailable for comment, joined Disney in February 2022 to help the company “create an entirely new paradigm for how audiences experience and engage with our stories,” according to the internal memo issued by Bob Chapek, the company’s former chief executive, who considered the metaverse as “the next great storytelling frontier.”

Chapek’s successor, Robert Iger, has also been enthusiastic about the metaverse-related opportunities. In March last year, Iger joined the board of Genies, Inc., a company offering tools for creating NFT-backed metaverse avatars, clothing, and accessories.

Currently, Disney’s vision for the metaverse looks blurry. The company suggested that the technology might be put to use in the fantasy sports and theme-parks domains but provided no further details. Layoffs coupled with budget cuts of about $5,5 billion, announced in February, certainly won’t push the strategy forward.

The most probable reasons for cutbacks include fierce competition from the streaming industry, dipping revenue from cable TV and cinema, and a general economic impasse.