Disney ditches metaverse in multi-billion dollar restructure

Disney has abandoned its metaverse project as part of a $5.5 billion cost cutting effort, according to reports.

A team of around 50 Disney employees were laid off, The Wall Street Journal reported, as the multimedia firm ditched ambitious plans to incorporate the metaverse into its offerings.

Former Disney chief executive Bob Chapek had described the metaverse as “the next great storytelling frontier”, telling employees last year that it would allow them to “create an entirely new paradigm for how audiences experience and engage with our stories”.

Under the leadership of new CEO Robert Iger, Disney is reportedly planning to undertake three rounds of layoffs to reduce the company’s headcount by around 7,000.

This comes as investors put pressure on Disney to cut nonessential businesses and focus on media, merchandising and experiences divisions that have traditionally provided the bulk of revenue.

It is the latest blow for companies making big bets on the metaverse, which uses virtual reality to create digital worlds that people can work and play within.

Dozens of notable companies have made forays into the technology but the biggest gambit has come from Mark Zuckerberg, who rebranded Facebook to Meta in 2021 in order to reflect the change in focus of the tech giant.

Mr Zuckerberg has described the metaverse as “the next chapter of the internet overall”, however investors have questioned such an early switch in direction when adoption remains relatively slow.

“Look, I get that a lot of people might disagree with this investment, but from what I can tell, I think this is going to be a very important thing,” the Meta boss said during an earnings call to discuss the company’s Q3 results last year.

“People will look back a decade from now and talk about the importance of the work being done here.”