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Walt Disney has knocked metaverse plans off its priority list. The entertainment giant’s “next-generation storytelling and consumer experiences” division had been tasked with exploring metaverse strategies.
But now Disney is eliminating the entire division as part of its restructuring map, which entails reducing the headcount by nearly 7,000 across the company over the next two months.
Metaverse No Longer a Priority for Disney
According to a WSJ report, Disney’s CEO Robert Iger said that the layoffs would begin this week. The metaverse division had nearly 50 members, all of which have lost their jobs. Its head Mike White was promoted to the role of SVP of consumer experiences and platforms in February 2022 and was tasked with getting the entertainment company deeper into the web3 space.
While White hasn’t been ousted in the downsizing, in what capacity the exec will function going forward is still unclear.
Reports also suggest that Disney was under tremendous pressure from investors to put a stop to non-essential businesses. As such, the company onboarded consultants from McKinsey & Co. to assist with cost-cutting opportunities. However, this move was not welcomed by some top content executives.
More recently, Disney announced its plans to make $5.5 billion in cuts in addition to slashing 7,000 jobs amid significant economic headwinds, stiff competition in streaming, and declining revenues from cable TV as well as cinematic box office that pressured many big media companies.
Metaverse, for one, is a long-term bet. It is far from being a mainstream phenomenon. The generation of any near-term revenue does not appear to be in the cards. This has frustrated many tech companies who have poured in billions of dollars in recent years for the effort.
Meta Playing the Long Game
The metaverse projects at the Mark Zuckerberg-led company are burning cash and falling flat. In 2022, Meta’s virtual/augmented reality arm lost $13.7 billion.
Despite the negative sentiment surrounding the space, Meta has no plans of eliminating or downsizing its metaverse efforts. The team expects full-year losses for the division to increase in 2023 and plans to invest “meaningfully” in this area. Zuckerberg had previously said that he is playing the long game while addressing the metaverse naysayers.
“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.”