To improve efficiency, Walt Disney has eliminated its next-generation storytelling and consumer experiences division. The stoppage is a part of a larger restructure that will probably result in 7,000 fewer employees over the following two months.
Ex Disney consumer product executive Mike White oversaw the division, and he was tasked with integrating the company’s huge intellectual property portfolio with cutting-edge technical formats. The little division’s task was to create metaverse plans.
There have been about 50 team members let go. Despite the fact that his new position is unclear and no remark was available, Mr. White is still employed by the company. Bob Chapek, the previous CEO of Walt Disney, engaged Mr. White, according to an internal letter from February 2022, to develop « an entirely new paradigm for audience engagement and experience. »
CHAPEK REFERRED TO THE METAVERSE AS THE « NEXT GREAT STORYTELLING FRONTIER. »
Disney didn’t specifically clarify its intentions for the metaverse, but Chapek claimed in a 2021 conference call that the company was giving customers « unparalleled opportunities. » In his words, « Today’s efforts are merely a prelude to a time when our physical and digital worlds will be even more intertwined, providing storytelling without frontiers in our own Disney metaverse. »
The metaverse was lauded by Chapek as « the next great storytelling frontier » before Iger took over in November. Even though Disney intimated that the new technology would be employed in fantasy sports, theme parks, and other areas of user contact, the division’s strategy was still unknown a year after it was established.
Last year, White participated as well to a membership project that resembled Amazon.com Inc.’s Prime program in several ways. The plan would also incorporate information from Disney’s online retail businesses and the apps that guests use to purchase food, merchandise, and other items at Disney’s theme parks in addition to Disney+.
THE SLOW GROWTH OF METAVERSE POPULARITY ANNOYS TECH COMPANIES
The project has reportedly also been given up, according to people with knowledge of the situation. It frustrates tech corporations that have made investments in new entertainment forms that the popularity of the metaverse is growing slowly. The parent company of Facebook and Instagram, Meta Platforms Inc., has invested billions on the metaverse despite little demand and widespread disorientation among customers.
A spokesman for Meta said that the company’s metaverse initiatives have always been multiyear. Despite the simple temptation to be pessimistic, the corporation is still certain that the metaverse is the next generation of computers.
SINCE FEBRUARY, DISNEY HAS EXPANDED ITS RESTRUCTURING STRATEGY
Following Chapek’s departure, Disney’s CEO Bob Iger assumed control. Following a busy two-year stint during which Covid-19 shut down, Chapek abruptly quit the company in November. The « Don’t Say Gay » law in Florida was a public relations disaster that significantly reduced streaming demand.
Iger has organized the business and stated that he is thinking about selling Hulu since taking back his position as CEO. A larger initiative to increase free cash flow and lower corporate spending is going place in conjunction with layoffs. Disney plans to slash spending by $5.5 billion, including $3 billion on content, as part of its cost-cutting strategy.
Mr. Iger has a positive outlook towards the metaverse. He became a board member of Genies Inc. as a result of his investments, which include software for building intricate online avatars for usage in the metaverse.
Investor pressure is mounting on the business to eliminate non-essential functions. Last year, the business recruited McKinsey & Co. experts to look for cost-cutting opportunities, which infuriated some top content executives.
Disney indicated it would eliminate approximately 7,000 positions and make $5.5 billion in layoffs as part of a larger reorganization plan in February. Many major media businesses have had financial difficulties, fierce competition in streaming services, and decreased revenues from cable TV and movies in the last few years.
Disney conducted its annual shareholder conference on April 3.
