Disney Fires Employees From Metaverse Division in $5.5B Restructuring
• Disney fired the employees of its metaverse division as part of its $5.5 billion restructuring plan.
• The Metaverse unit was responsible for creating interactive stories in new technological formats using Disney’s IP.
• The company took the decision to sunset the metaverse division as it addressed many challenges posed by economic headwinds and streaming competition.
Disney Restructuring Plan
The Walt Disney Company has begun laying off thousands of employees to cut costs and is part of a broader restructuring plan that seeks to reduce the company’s staff count by 7,000 over the next couple of months.
Metaverse Division Shuttered
Among those caught in the layoffs are employees from the division that were working on the company’s metaverse strategy and consumer experiences unit, which was headed by Mike White. This 50-person strong team was tasked with finding ways to tell interactive stories in new technological formats using Disney’s extensive library of intellectual property. When Disney created this unit back in February 2022, former CEO Bob Chapek had predicted that it would create an entirely new paradigm for how audiences experience and engage with their stories.
Partnership With Polygon
In July last year, Disney had collaborated with Polygon [MATIC] for its accelerator program which revolved around developing new products using augmented reality (AR), non-fungible tokens (NFT) and artificial intelligence (AI). A 2021 Citi report stated that Disney was among a group of companies that could benefit from NFTs.
Cost Savings From Restructuring Plan
Disney decided to take the decision to sunset its metaverse division as it addressed many challenges posed by economic headwinds and rising competition from rivals in the streaming space. The restructuring plan could save more than $5 billion for the firm as news of layoffs lead to a 1.5% increase in share price on 27 March 2021.
By cutting out 7,000 employees through downsizing and shutting down divisions such as metaverse, Disney will be able to make significant cost savings while also addressing issues such as economic headwinds and increasing competition from rival streaming services .