Disney is eliminating its Metaverse division as part of the company’s layoff plan

Mickey Mouse has left the metaverse.

Walter Disney Co.

DIS 1.64%

has eliminated its next-generation storytelling and consumer experience division, the small division that people familiar with the situation said was working on metaverse strategies, as part of a broader restructuring that is expected to reduce company-wide workforce by approximately 7,000 over the next two months.

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

All of the team’s 50 or so members have lost their jobs, the people said. Mr. White will remain with the company, although it is unclear what his new role will be.

Mr White could not be reached for comment.

Former Disney CEO 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 interact with our stories” .

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

Plans for Disney’s reverse strategy remained vague a year after the division was founded, though the company had hinted that the new technology could potentially have applications in fantasy sports, theme parks and other consumer experiences.

Mr White was also involved last year in an effort to design a membership initiative that was similar in some ways to Amazon.com from Inc

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 purchase food, merchandise and other products.

That effort has also been discontinued, according to acquaintances of the case.

Mr. Iger was optimistic about the metaverse. Last year, he invested in and became a member of the board of directors of Genies Inc., a technology startup that sells tools that allow users to create rich online avatars for use in the metaverse.

Disney is under pressure from investors to cut back heavily on non-essential 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 implement $5.5 billion in budget cuts and cut about 7,000 jobs as part of a broader restructuring plan. Economic headwinds, fierce competition in streaming and dwindling cable TV and box office revenues have put pressure on many major media companies.

The slow growth of the metaverse’s popularity has frustrated tech companies that have bet on new entertainment formats. Meta platforms Inc.,

the parent company of Facebook and Instagram, has shifted billions of resources to the metaverse, only to find low user demand and widespread user confusion over how to use the technology.

A spokesperson for Meta has said the company’s metaverse effort was always intended to be a multi-year project. He said it’s easy to be cynical about the metaverse, but the company continues to believe it’s the future of computing.

Write to Robbie Whelan at robbie.whelan@wsj.com and Joe Flint at Joe.Flint@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


Leave a Reply

Your email address will not be published. Required fields are marked *