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Disney Eliminates Its Metaverse Division as Part of Company’s Layoffs Plan

The unit, once seen as developing a new form of storytelling, had about 50 employees

Disney Eliminates Its Metaverse Division as Part of Company’s Layoffs Plan

A cura di Monica e Tiziana Origgi Mickey Mouse has left the metaverse. Walt Disney Co. DIS 1.27% has eliminated its next-generation storytelling

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A cura di Monica e Tiziana Origgi

Mickey Mouse has left the metaverse.

Walt Disney Co. DIS 1.27% has eliminated its next-generation storytelling and consumer-experiences unit, the small division that was developing metaverse strategies, according to people familiar with the situation, as part of a broader restructuring that is expected to reduce head count by around 7,000 across the company over the next two months.

Headed by Mike White, a former Disney consumer-products executive, the division was tasked with finding ways to tell interactive stories in new technological formats using Disney’s extensive library of intellectual property, the people said.

All of the team’s roughly 50 members have lost their jobs, the people said. Mr. White remains at the company, although what his new role will be is unclear.

Mr. White couldn’t be reached for comment.

Disney’s former chief executive, Bob Chapek, hired Mr. White in February 2022, telling employees in an internal memo at the time that the goal was to “create an entirely new paradigm for how audiences experience and engage with our stories.”

Mr. Chapek, who was succeeded as CEO by Robert Iger in November, had described the metaverse as “the next great storytelling frontier.”

Plans for Disney’s metaverse strategy remained sketchy a year after the division was created, although the company had hinted that the new technology might have applications in fantasy sports, theme-park attractions and other consumer experiences.

Mr. White was also involved in an effort last year to design a membership initiative that in some ways resembled Amazon.comInc.’s Prime program, which would integrate customer data across multiple Disney platforms, including streaming service Disney+, online retail operations and smartphone apps that visitors to Disney’s theme parks use to buy food, merchandise and other products.

That effort has also been abandoned, according to people familiar with the matter.

Disney shares fell 0.3% to $95.34 in Tuesday morning trading. Through Monday, the stock was up 10% in 2023.

Mr. Iger has been bullish about the metaverse. Last year, he invested in and joined the board of Genies Inc., a technology startup that sells tools allowing users to create elaborate online avatars for use in the metaverse.

Disney is under pressure from investors to make cuts to nonessential businesses. Last year, the company hired consultants from McKinsey & Co. to help find cost-cutting opportunities, a move that angered some top content executives.

In February, Disney announced it would make $5.5 billion in cuts and cut about 7,000 jobs as part of a broader restructuring plan. Economic headwinds, stiff competition in streaming and dwindling revenues from cable TV and the cinematic box office have pressured many big media companies.

Slow growth in the popularity of the metaverse has frustrated tech companies that have bet on new entertainment formats. Meta Platforms Inc., the parent of Facebook and Instagram, has shifted billions in resources to the metaverse, only to find low demand and widespread confusion among users about how to use the technology.

A Meta spokesman has said the company’s metaverse efforts were always intended to be a multiyear project. He said that it is easy to be a cynic about the metaverse, but that the company continues to believe it is the future of computing.

Source: wsj.com

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