Walt Disney has deprioritized metaverse plans, with the company’s “next-generation storytelling and consumer experiences” division previously tasked with exploring metaverse strategies.
However, as part of its ongoing restructuring plan, Disney is now eliminating the entire division and reducing its headcount by almost 7,000 across the company over the next two months.
Disney’s Metaverse Plans Take a Back Seat
According to a report by WSJ, Disney CEO Robert Iger confirmed that the layoffs will begin this week. The metaverse division, consisting of nearly 50 members, will no longer exist and its former head, Mike White, was promoted to the role of SVP of consumer experiences and platforms in February 2022, tasked with delving deeper into the web3 space.
While White hasn’t been laid off, it’s unclear what role he will play following the restructuring.
Reports suggest that Disney was pressured by investors to cut costs, leading to the hiring of consultants from McKinsey & Co. to assist with the cost-cutting exercise. However, some top content executives were unhappy with the decision.
Disney recently announced plans to reduce costs by $5.5 billion in addition to slashing 7,000 jobs, with mounting economic pressures, stiff competition in the streaming market, and declining revenues from cable TV and box offices putting several big media companies under strain.
However, the metaverse remains a long-term bet, and the generation of any near-term revenues appears unlikely. This has frustrated several tech companies, who have invested billions in recent years in metaverse efforts.
Meta Not Giving Up on Metaverse
Meta’s metaverse projects have been burning cash and yielding disappointing results, with the company’s virtual and augmented reality arm losing $13.7 billion in 2022 alone.
Despite this, Meta has no plans to scale back its metaverse efforts, with the team expecting full-year losses to increase in 2023 and intending to invest significantly in this area. Mark Zuckerberg has previously stated that he is playing the long game and remains undeterred by naysayers who doubt the metaverse’s potential.
“Look, I get that a lot of people might disagree with this investment, but from what I can tell, I think this is going to be a very important thing. People will look back a decade from now and talk about the importance of the work being done here.”