Disney’s metaverse division takes a hit as the company faces a new wave of layoffs to cut costs. According to Wall Street Journal, Disney disintegrated its next-generation storytelling and consumer-experiences unit (metaverse division), which had about 50 people. The move was announced on March 27 by the current CEO, Bob Iger.
The layoff, expected to come in three waves, is part of the company’s grand move to cut costs by $5.5 billion. As stated in the memo sent to the now-dismissed employees, Disney hopes to realign their business by taking a more effective, coordinated, and streamlined approach.
Regardless, while roughly 50 employees of the metaverse unit were sent home, Mike White, the leader of the disintegrated unit, somehow escaped the “axe”. However, the current CEO’s intentions behind his exemption remain unclear.
A Look At The Past
Disney’s metaverse unit started in February 2022, when CEO Bob Chapek dubbed it “next-generation storytelling.” The trend gained traction after the CEO of Meta, Mark Zuckerberg, publicly stated his intentions to invest in the Metaverse in October 2021. Zuckerberg even changed his enterprise’s name to Meta to show his extra dedication to the cause.
The doggedness of the Facebook CEO made media companies believe the metaverse was tech’s next big thing, with Disney making the team for it. But this flair lasted only a short time. As 2022 ended, it came with people talking about names like ChatGPT. Amidst perfectly written scripts and scarily good AI-generated images, people now see AI as a lever in the industry. A lot of people look back at the metaverse as merely a fascinating punchline and AI as the new big thing.
A Glimpse Of The Future
Although the recent AI engagement seems similar to that of the metaverse last year, it would seem that this technology can actually make a difference in productivity and various innovations. The dawn of AI even has the earlier enthusiastic metaverse investor, Mark Zuckerberg, making new investments. On March 16, Zuckerberg stated that the metaverse remains a vital component of the business. However, the company’s new, most significant investment is advancing AI and building it into each of Meta’s products.
Although Disney has taken a step away from the metaverse. However, it is likely that the CEO’s decision to retain the unit’s leader, Mike White, is to prepare for any eventualities. Nonetheless, Disney’s move to disintegrate the Metaverse unit was a big say on how they viewed the project—not a worthy investment. For now, the future of what this lay off move might mean is bleak. But we know some enterprises will follow Disney’s move and make cuts in their metaverse unit unless something extraordinary happens.
Impact On The Entertainment Industry
Disney’s decision to abandon its Metaverse plans could have a significant impact on the entertainment industry as a whole. The Metaverse concept has been gaining traction in recent years, and many companies have been investing in it. If Disney’s decision is seen as a setback, it could discourage other companies from pursuing Metaverse projects.
On the other hand, Disney’s decision could also be seen as a signal that the Metaverse is not yet ready for prime time. The concept is still in its early stages, and there are many technical and legal issues that need to be addressed. It is possible that other companies will take a more cautious approach and wait for the technology to mature before investing in Metaverse projects.