Walt Disney Co. is beginning several rounds of layoffs this week intended to reduce Team Mickey’s head count by 7,000 jobs and cut costs by more than $5 billion.
But no less striking than layoffs at the Happiest Place on Earth is news from the Wall Street Journal that, as part of the cuts, Disney will eliminate its entire division focused on developing content for the metaverse.
“All of the team’s roughly 50 members have lost their jobs,” the Journal reported, citing “people familiar with the situation.”
The metaverse, in case you’re late to the party, is a reimagining of the internet with virtual and augmented reality. Which is to say, you have to wear bulky headsets to experience it.
And that’s something most people so far would rather not do.
Former Disney CEO Bob Chapek was bullish on the metaverse. He wanted Disney’s metaverse division to find cool new ways to tell stories using the technology.
New/returning CEO Bob Iger, on the other hand, has clearly decided otherwise.
As the Journal put it, “Slow growth in the popularity of the metaverse has frustrated tech companies that have bet on new entertainment formats.”
No company is more frustrated than Facebook parent Meta Platforms, which was so hot for the metaverse, it used it for the company’s name.
Meta has lost billions of dollars to date on its metaverse investments and keeps pleading with Wall Street to take the long view when it comes to this tech.
It’s a tough sell. At this point, the metaverse is little more than a video-game-style virtual-reality playground that lets you interact with others via cartoonish avatars.
If that’s your cup of digital tea, great. But slow sales for metaverse products show that consumers remain wary of strapping headsets to their faces and having screens just millimeters from their eyes.
Disney is one of the few big content producers to throw in the towel on this technology.
It’s not hard to suspect more will follow.