Disney mucks metaverse unit as part of larger layoff – report
The Walt Disney Company has eliminated its metaverse division as part of a broader layoff at the media giant, The Wall Street Journal reported, citing people familiar with the situation.
The WSJ said Disney's metaverse unit, originally developed to create new types of interactive storytelling, had about 50 employees. Mike White, the head of the metaverse unit and a former Disney consumer products exec, remains at Disney, the WSJ said.
The metaverse division was a casualty in an initial wave of layoffs at Disney. Disney is expected to reduce headcount by about 7,000 across the company – or about 3.2% of its global workforce – in the next couple of months as part of a broad cost-cutting plan.
"Leaders will be communicating the news directly to the first group of impacted employees over the next four days," Disney CEO Bob Iger wrote in a memo obtained by CNBC. "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."
Disney is targeting about $5.5 billion in cost savings across the company, including non-content costs of about $2.5 billion. Disney revealed plans for the employee layoff last month during its fiscal Q1 2023 earning call. Iger, who recently returned as CEO, replacing the ousted Bob Chapek, outlined a "significant transformation at Disney that aims to grow the company's streaming business with a major emphasis on profitability.
Tied in, Disney is being reorganized into three core business segments: Disney Entertainment; ESPN and Disney Parks; and Experiences and Products.
The metaverse unit also has links to the short-lived Chapek regime. The WSJ noted that Chapek hired White to the role in February 2022, and referred to the metaverse as "the next great storytelling frontier" in an internal memo.
While it's not clear how Disney might engage with the so-called metaverse in the wake of the decision, wired and wireless networks are being made to help support the kinds of capacities and low-latencies that such applications and services are expected to require in the years ahead.
Much ado about the metaverse
But there's plenty of debate there as well.
Meta, the umbrella company that contains Facebook that's now making a monster bet on the metaverse, views 5G networks as a good fit for the platform as it and other "Big Tech" companies come under pressure from operators in Europe to help pay for their networks.
"Network fee proposals are based on a false premise," two Meta execs declared in a blog post.
In a Politico event sponsored by the European Telecommunications Network Operators' Association (ETNO), Phillip Malloch, Meta's director of social and economic policy, argued that it is ultimately the job of the telcos to invest in, build and monetize network infrastructure in Europe.
- Disney's 'significant transformation' zeroes in on streaming profitability
- Meta says it's the telcos' job to build and monetize network infrastructure
- Apparently, the metaverse will run just fine on 5G
- Meta promises to double down on the metaverse in 2023
— Jeff Baumgartner, Senior Editor, Light Reading