Metaverse plans have been dropped from Walt Disney’s priority list. The “next-generation storytelling and consumer experiences” division of the entertainment conglomerate had been tasked with investigating metaverse strategies.
However, Disney is now eliminating the entire division as part of its restructuring plan, which includes reducing the company’s headcount by nearly 7,000 over the next two months.
According to the Wall Street Journal, Disney CEO Robert Iger stated that layoffs would begin this week. The metaverse division had nearly 50 employees, all of whom were laid off. Mike White, the company’s CEO, was promoted to SVP of consumer experiences and platforms in February 2022, and was tasked with taking the entertainment company deeper into the web3 space.
While White has not been fired as a result of the downsizing, it is unclear in what capacity the executive will function in the future. According to reports, Disney was also under intense pressure from investors to discontinue non-essential operations. As a result, the company hired McKinsey & Co. consultants to assist with cost-cutting opportunities. Some top content executives, however, were not pleased with the move.
More recently, Disney announced plans to cut $5.5 billion in costs as well as 7,000 jobs in the face of significant economic headwinds, stiff competition in streaming, and declining revenues from cable TV as well as cinematic box office, all of which put pressure on many big media companies.
For example, Metaverse is a long-term bet. It is far from a widespread phenomenon. It does not appear that any revenue will be generated in the near future. This has irritated many tech companies, which have invested billions of dollars in the effort in recent years.
The Mark Zuckerberg-led company’s metaverse projects are wasting money and falling flat. Meta’s virtual/augmented reality arm lost $13.7 billion in 2022. Despite the negative perception of the space, Meta has no plans to eliminate or scale back its metaverse efforts. The team anticipates that full-year losses for the division will rise in 2023 and plans to invest “significantly” in this area. While addressing the metaverse skeptics, Zuckerberg previously stated that he is playing the long game.
“Look, I understand that many people may disagree with this investment, but from what I can tell, I believe it will be very important.” People will reflect on the significance of the work done here a decade from now.”
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