We’ve certainly entered the era of mass layoffs for the entertainment industry, with even the House of Mouse looking to jettison 7,000 employees in their latest round of cost reduction. While there’s been considerable roll-back of much of Disney’s Chapek-era restructuring in recent months, many are still surprised to see their explorations in the so-called Metaverse hit the chopping block this week. Brandon Blake, our expert entertainment attorney from Blake & Wang P.A, has all the details.
The Rise and Fall of the Metaverse Unit
The Disney Metaverse unit was the focus of a lot of upsell from Disney under Bob Chapek’s leadership, being seen as a next-generation growth opportunity for the company. 2022 was perhaps the heyday (to date) of companies jumping on the excitement around the Metaverse concept, even seeing FaceBook’s parent company rebrand itself as ‘Meta Platforms’. However, many of these investments in Metaverse-based technology have yet to show significant profits or traction. As one of Disney’s smaller business units, 50 positions have now been eliminated. Unit leader Mike White, however, will remain at the company in a role that’s yet to be confirmed.
Executive Departures and More
As we see the first round of Disney’s layoffs launch, hoping to generate about $5.5B in cost savings, we’ve also seen a number of executive departures from Disney’s general entertainment arms. While Bob Iger, once again at the helm, remains buoyant about technology developments for the company, he’s also slowly but surely been rolling back many of the Chapek-era initiatives, especially when it comes to corporate structure. Given the lack of real progress made with the Metaverse unit to date, it’s unsurprising that it would come up on the chopping block as an obvious cost reduction.
What does this mean for Disney’s longer-term developmental prospects, however? It’s still a little early to declare the Metaverse concept a flop, but with the current refocusing of the tech world on AI and its potential, it will probably be a while before we see any significant future-forward developments in this arena.
