When layoffs begin, Disney eliminates its Metaverse unit.

According to a person with knowledge of the matter who spoke to The Hill, Disney is getting rid of its metaverse division as part of their plan to fire 7,000 employees and save the corporation billions of dollars.

The idea to eliminate the department in charge of creating metaverse plans was initially revealed by the Wall Street Journal, who used sources close to the situation. The Hill’s reporting by the Journal was verified by the source.

According to sources cited by the Journal, a division at Disney was tasked with exploring ways to tell interactive stories using new technologies and the company’s intellectual property library. Unfortunately, all 50 employees in this division were laid off as part of the company’s broader cost-cutting measures announced by CEO Bob Iger in February. Although division leader Mike White remains at Disney, it’s unclear what his new role will be.

Iger had stated that the layoffs, which will amount to about 3 percent of Disney’s global workforce and save the company $5.5 billion, were necessary for a “significant transformation” that he believed would increase Disney’s profitability. The company is starting to notify affected employees this week, with a first group being informed within the next four days, and a second and larger round planned for next month affecting “several thousand” more workers. The final round of notifications is expected to take place before summer.

Iger acknowledged that saying goodbye to colleagues and friends at Disney was a difficult reality that the company did not take lightly. He also recognized that for those remaining at the company, challenges would lie ahead as Disney continues to build structures and functions for future success.

The Journal had reported that Disney had explored the role of the metaverse in fantasy sports, theme park attractions, and consumer experiences.