The Disney layoffs were called a “bloodbath” by the news media once they confirmed my exclusive leak about the growing numbers being applied to those cuts. I was critical of the terminology. Perhaps I was wrong.
Bob Iger is on a rampage when it comes to eliminating expense at The Walt Disney Company. Although former CEO Bob Chapek had wanted to cut positions and bring costs to a reasonable number, Iger is going beyond what was originally anticipated. Seven-thousand jobs are being cut by the summer with more job cuts later likely being added. All-in-all, Disney could cut between 3 – 6% of its total workforce. Given that many of its positions in the theme parks (the largest employment divisions of the company) are very difficult to eliminate, we always knew that other parts of Disney could suffer the brunt of the cuts. But I did not expect to see entire divisions deleted.
That’s exactly what is happening with the Research and Development team behind metaverse “next generation storytelling”. The entire fifty-person team is being eliminated, almost every single person not only losing their title but also their place in the company. Almost none are being transferred to another spot. And what is so amazing about this is that while we had heard DEI and HR positions might be on the chopping block, it seems more likely that any group of people brought in through a Chapek initiative are the ones that are really in trouble. Eliminating everyone involved in working on next gen media strategies is surprising!
Walt Disney is turning its back on the metaverse. It’s another example of a company scaling back its ambitions for the much-hyped technology as investors demand evidence of tighter cost control.
Disney DIS +1.64%(ticker: DIS) is cutting around 50 people, or almost all of the employees, in its next-generation storytelling and consumer experiences unit, according to The Wall Street Journal, citing people familiar with the matter. That was the unit set up to explore the kind of interactive storytelling enabled by the virtual world of the metaverse.
— Adam Clark, Barron’s
One of the interesting things about cutting out an entire division devoted to next generation technology is that it recalcitrants the future potentials. Without an eye on the horizon, things may just be crystalized to the products currently in development.
Or maybe Disney just looked at how things are going with Facebook / Meta and decided… “yeah, that’s not a great future for us.”
For all the latest news that should be fun, keep reading That Park Place. As always, drop a comment down below and let us know your thoughts!
I think your latter supposition is correct: Disney, looking for places to make cuts, decided that risky ventures aren’t a good idea right now. Meta is the riskiest of ventures and they can always buy in again later if things get better, so this seems like a no-brainer from where Iger’s sitting. I don’t think it has anything to do with Chapek at all.
To be honest, it’s probably for the best!
Theme parks aren’t cut because they have the lowest paid workers with the highest turnover that ensures low pay. Theme parks have guaranteed profits at high margins. The only reason they aren’t making more money is Disney intentionally kept parks capacity low by not building sufficient attractions at all parks especially their minor parks. They hindered development at Disneyland Resort. If they built their 4th Hotel 5 years ago without waiting for Anaheim to subsidize it, it would still be cheaper than today’s inflation. Theme park profits are transferred to the studios or dumb initiatives that don’t always pay off.