The Walt Disney Company has abandoned its metaverse division, laying off the entire unit as part of broader job cuts within the entertainment conglomerate.
First reported by the Wall Street Journal, the division was originally developed to explore new avenues for interactive storytelling and was roughly 50 employees strong.
Sources close to the WSJ have said the majority of those who worked on Disney’s attempted foray into the metaverse are leaving jobless, however, the former head of the metaverse unit, Mike White, is reportedly still with the company despite the loss of the division.
Part of a broader cost-cutting plan announced in its fiscal Q1 2023 earning call, Disney plans to cut around 7,000 jobs in the coming months to reduce its global workforce by just over 3% and its metaverse division appears to have been hit by the first wave.
In a memo obtained by CNBC, Disney CEO Bob Iger said: “This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions.
“Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000 job target.”
It’s unclear exactly how these job cuts will affect Disney’s metaverse plans for the future but they indicate that interactive storytelling development from within the company may have stalled, at least in the short term.
While the entertainment giant cuts back its metaverse investments, Disney has ramped up its performance marketing tools for advertisers following the introduction of ‘Basic With Ads’ video streaming tier last month.
The conglomerate has developed its own ad-serving technology to deliver ads on Disney+ and Hulu called YODA (Yield Optimized Delivery Allocation), which uses an algorithm to determine when it should serve an ad to individual viewers.
It balances direct-sold, programmatic and self-serve ad buys alongside the other adtech named after a character from Marvel: the Disney Real-time Ad Exchange (DRAX) that sells Disney’s ad inventory programmatically.