• by Karlene Lukovitz  @KLmarketdaily, March 28, 2023

In another indication that the once high-flying metaverse concept has hit hard times, Disney is eliminating its metaverse division.

The move will cut roughly 50 employees in the first round of about 7,000 layoffs to be implemented over the next two months, according to the Wall Street Journal.   

The “next generation storytelling and consumer experiences” unit, charged with creating immersive story formats employing Disney’s Pixar, Marvel, Star Wars and other IP, was formed by then-CEO Bob Chapek soon after Facebook announced its rebranding to Meta in late 2021.  

At the time, Chapek declared it a “perfect place to pursue our strategic pillars of storytelling excellence, innovation and audience focus.”

Rumors of the unit’s demise began soon after Bob Iger returned as CEO last November and began dismantling Chapek’s initiatives in the course of pursuing $5.5 billion in cost cuts. 

However, Iger — who before returning to Disney invested in and joined the board of metaverse startup Genies — is said to actually be enthusiastic about the metaverse, and it is possible that Disney plans to continue metaverse work within other teams.

Mike White, formerly senior vice president of consumer and experiences and platforms, was promoted to head the metaverse division in February 2022. It appears that White will remain at Disney in some other role.

On Monday, Iger confirmed in a memo to employees that the already-announced companywide layoffs would start this week, with several thousand more coming next month, and a final wave of cuts before summer. Last month, he implemented a restructuring that streamlined the company into three segments: entertainment, parks, and experiences/products/ESPN.

Meta CEO Mark Zuckerberg — who recently ordered a second massive round of layoffs —  has pulled back from the company's metaverse-driven strategy in favor of focusing on generative AI.