What just happened? In news that will likely make Mark Zuckerberg sweat, Disney has just laid off its entire metaverse team as part of cost-cutting plans that will see 7,000 people lose their jobs over the next two months. It's another blow to the metaverse concept, which many tech companies are now ignoring as they rush to embrace generative AI.
According to the Wall Street Journal, citing people familiar with the situation, Disney's broader restructuring and cost-cutting plan involved disbanding its next-generation storytelling and consumer experiences unit, which focused on the company's metaverse ambitions.
Former Disney consumer-products executive Mike White headed the division, which has seen all 50 of its members laid off. White remains at the company in an unknown capacity.
The WSJ writes that Disney's former chief executive, Bob Chapek, hired White in February 2022 with the goal of creating "an entirely new paradigm for how audiences experience and engage with our stories."
Chapek is, or perhaps was, a big believer in the potential of the metaverse, describing it as "the next great storytelling frontier." He also invested in and joined the board of a metaverse startup called Genies, which sells tools that allow users to create avatars for use in virtual worlds.
Like many companies, Disney's metaverse plans were not a defined path. It previously hinted that the technology could have applications in fantasy sports, theme-park attractions, and other consumer experiences. It has also produced augmented reality content, including Remembering, an eight-minute AR short film starring Brie Larson.
The move represents more bad news for the metaverse and those invested in it. Meta's Reality Labs, the division responsible for its metaverse push, has lost over $24 billion since 2021. CEO Mark Zuckerberg certainly doesn't talk about the technology very much these days, and last month announced the company's plans to implement generative AI into its services, seemingly prioritizing this area over its metaverse project.
There was more bad news for Zuckerberg earlier this month when two Democratic senators wrote a letter to the Meta boss, asking him to halt the plan to lower Horizon World's age limit to 13 in light of the company's record of failing to protect children and teens.