Disney has scrapped its metaverse division and announced 7,000 layoffs, the Wall Street Journal (WSJ) reported on Tuesday.
Citing familiar sources, the WSJ revealed that Disney planned to axe its metaverse department. The new division aimed to produce Web3 content with the media giant’s intellectual property catalogue.
According to reports, Disney laid off the 50-person team. However, the WSJ added that its leader, Mike White, will stay with the company under a currently undisclosed role.
The news comes after Bob Iger, Chief Executive, Disney announced the round of layoffs in February amid his company’s “significant transformation.”
Disney layoffs will hit roughly 3 percent of its global employees, allowing the company to pocket roughly $5.5 billion in expenses. Doing so would boost Disney’s profitability, Iger continued.
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Bob Iger Memo on Disney Layoffs
In the memo, Iger explained the first of three rounds of Disney layoffs as part of its “strategic realignment” of the firm. The cuts aimed to create a “more effective, coordinated and streamlined approach” to business.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target”
Iger continued that Disney did not “take lightly” the news of the layoffs, adding: “This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here […] It also makes it all the more difficult to say goodbye to wonderful people we care about.”
Concluding, he said remaining employees would “no doubt be challenges ahead” as the company progressed. Also, human resource partners would offer support for redundant workers.
Disney Metaverse Accelerator
The news comes just months after the firm launched a Web3 accelerator programme to build emerging technologies for its operations.
Disney selected six startups to build solutions and immersive experiences to engage audiences. It would focus on digital assets such as augmented reality (AR), artificial intelligence (AI), and non-fungible tokens (NFTs)
At the launch, Bonnie Rosen, Disney’s General Manager for the Accelerator, said that her division aimed to further its “commitment to innovation.” Additionally, she expected the programme to “bring magical experiences to Disney audiences and guests for the next 100 years.”
Also, Polygon Studios, FlickPlay, Lockerverse, Inworld, Obsess, and Red 6 were selected for the pilot programme. Disney has aimed to increase its intellectual property, namely after launching an interactive AR movie for home viewers.
The news comes as numerous firms such as Meta Platforms, Microsoft, Amazon, Accenture, Salesforce, and many others slashed their staff by thousands of workers. Many tech firms have cited overhiring from the COVID-19 pandemic, market crises, and slow metaverse adoption.