Disney is eliminating its metaverse unit as part of its plan to lay off 7,000 workers that will save the company billions of dollars, a source familiar with the situation told The Hill.
The Wall Street Journal first reported the plan to cut the division responsible for developing metaverse strategies, citing people familiar. The source confirmed the Journal’s reporting to The Hill.
The people told the Journal that the division was charged with finding methods to tell interactive stories with new technologies using the company’s intellectual property library. The division had about 50 employees, all of whom were laid off.
The division’s leader, Mike White, is staying at the company, but his role is unclear, according to the Journal.
CEO Bob Iger first announced the layoffs in February, saying that Disney will undergo a “significant transformation.” The layoffs will cut about 3 percent of Disney’s global workforce and are designed to save the company $5.5 billion.
Iger said at the time that he believes the transformation will increase Disney’s profitability.
He said in a message to Disney employees that was obtained by The Hill that the company is starting to notify employees affected by the layoffs this week.
“Leaders” will share the news with the first group of employees being laid off in the next four days, while a second and larger round will happen next month with “several thousand” additional layoffs, according to Iger.
He added that Disney expects to begin the final round of layoff notifications before the summer starts.
“The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,” Iger said. “This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special.”
“It also makes it all the more difficult to say goodbye to wonderful people we care about,” he added.
Iger said he knows that for employees unaffected by the layoffs, the “challenges” will remain ahead for the company as it builds the “structures and functions” for being successful in the future.
The Journal reported that Disney had indicated the metaverse might have played a role in fantasy sports, attractions at theme parks and consumer experiences.
The Associated Press contributed to this report.