Josh D’Amaro has faced a bruising first week as chief executive of the Walt Disney Company, with a pair of billion-dollar technology initiatives faltering just days after he succeeded Bob Iger.
The setbacks, involving high-profile partnerships with Epic Games and OpenAI, come at a sensitive time for the entertainment giant as it also navigates a widening controversy within its television division.
The instability began on Tuesday when Epic Games Inc. announced the layoff of 1,000 employees. The developer behind the global phenomenon Fortnite confirmed it was struggling with a downturn in engagement, leading to a disconnect with its fan base, Bloomberg reported.
The news is a blow to Disney, which announced a $1.5 billion investment in Epic two years ago with the intent of creating a persistent digital universe populated by Disney characters.
In a further blow to D’Amaro’s vision for a tech-integrated future, OpenAI announced the closure of Sora, its artificial intelligence video generator. The decision effectively ended a partnership that would have seen Disney make a $1 billion equity investment in the firm.
Disney had intended to use Sora to allow fans to generate social media content using approximately 200 characters from the Star Wars and Marvel franchises.
In a statement following the announcement, Disney described the AI field as “nascent” and noted that change in the sector occurred rapidly, adding that it would continue to engage with other AI platforms.
Epic founder Tim Sweeney told staff in a memo Tuesday that $500 million in cost cuts would prepare the company for major launches later this year. He did not specifically address the status of the Disney project in the memo.
According to Bloomberg, the Epic deal was a cornerstone of D’Amaro’s strategy, as the executive previously oversaw Disney’s theme parks and gaming sectors.
Markets reacted unfavorably to the announcements, with Disney shares closing down 1.6 per cent on Tuesday, falling again on Wednesday.
These corporate hurdles arrive as D’Amaro attempts to stabilize a company already reeling from social and production-related controversies.
ABC, the Disney-owned network, recently took the unprecedented step of cancelling the upcoming season of The Bachelorette. The decision followed the leak of a 2023 video involving the season’s intended lead, Taylor Frankie Paul, which appeared to show a violent domestic incident.
Disney stated that in light of the footage, it would not move forward with the season, citing a need to support the families involved. Representatives for Paul told Variety that the release of the video was part of a “destructive campaign” by her former partner and lacked proper context.
The franchise has long been criticized for its handling of social issues. Over its twenty-year history, The Bachelor and The Bachelorette have faced allegations of excluding contestants of color, a trend that only began to shift with the casting of Rachel Lindsay as the first Black lead in 2017.
Since then, the franchise has struggled to balance its traditional format with modern social expectations. High-profile incidents, such as the 2021 departure of long-time host Chris Harrison after he defended a contestant’s attendance at an antebellum plantation-themed party, have left the brand in a state of perpetual scrutiny.
D’Amaro, 54, saw his rise to the top of Disney after nearly three decades of service within the company.
A graduate of Georgetown University, he began his career in finance at Gillette before joining Disney in 1998. He rose through the ranks of the parks division, eventually serving as president of Disneyland Resort in California and Walt Disney World Resort in Florida. He was a central figure during the Covid-19 pandemic, overseeing the closure of global theme parks and the subsequent layoff of 28,000 employees.
