Disney is exiting the metaverse entirely — and laying off around 50 employees from its metaverse division.
The move comes as the Walt Disney Co. announced a round of layoffs impacting around 7,000 people. The fledgling division was tasked with developing new metaverse strategies and was headed by Mike White, a former Disney Consumer Products exec.
All of the team’s 50 members have lost their jobs, while Mr. White will remain at the company. What his new role within Disney will be is still unclear at this time. Disney’s former CEO Bob Chapek hired White in February 2022 with the goal of “creating an entirely new paradigm for how audiences experience and engage with our stories.” Disney created its metaverse division on the heels of Facebook’s transformation from just Facebook to Meta.
The metaverse division explored many opportunities for which to exploit Disney IP, including fantasy sports, theme-park attractions, and other consumer-focused experiences.
According to sources who spoke to The Wall Street Journal, Mr. White was involved in an effort to design a membership initiative similar to the Amazon Prime program. The idea would allow the company to integrate customer data across multiple Disney platforms, including streaming services, retail operations, and smartphone apps that Disney park users use to pay for food and merchandise.
The effort to create an Amazon Prime-like service for Disney customers was dropped, however. Following the news of axing its metaverse division, Disney shares fell 0.3%, though the stock was up 10% in 2023.
Currently the company is facing pressure from investors to make cuts to what are considered nonessential businesses. The job cuts are expected to save the company $5.5 billion as part of its broader restructuring plan. The stiff competition in the streaming market and dwindling revenues from cable TV and the box office may have influenced some of Disney’s decision-making.