Disney’s New CEO Initiates Major Layoffs at Marvel, Disbands VFX Team

Disney’s New Leadership Targets Marvel for Major Restructuring

The Walt Disney Company has announced a large-scale organizational overhaul following the appointment of its new CEO, Josh D’Amaro. The first step in this restructuring has targeted Marvel Studios, once referred to as the company’s “cash cow.”

Shortly after taking office, D’Amaro released an internal memo to all employees, announcing the elimination of approximately 1,000 positions. Among the key targets of these cuts is Marvel’s visual development team, with nearly all internal team members reportedly being dismissed. Moving forward, Marvel plans to adopt a model of hiring external contractors on a project-by-project basis to handle visual development work. This decision effectively erases over a decade’s worth of “institutional memory” related to the visual design of its characters and world-building.

The move has been met with criticism from several former employees and actors. Evangeline Lilly, who portrayed the Wasp in the “Ant-Man” series, condemned the decision on social media, calling it a “regrettable and shameful act.”

From Box-Office Goldmine to Financial Poison: The Rapid Decline of Marvel

Marvel’s fall from grace has been swift. Back in 2019, the studio was at its peak, with all three of its releases that year—most notably Avengers: Endgame—grossing over $1 billion each, for a combined global box office revenue exceeding $5 billion.

However, its pull has noticeably waned since the COVID-19 pandemic. The 2023 release of The Marvels marked the lowest box office performance in Marvel’s history, earning only $206 million globally and incurring estimated losses of $273 million. By 2025, for the first time, no Marvel film was expected to rank among the year’s top 10 global box office earners—a stark contrast to its former dominance.

The Triple Crisis: Internal Factors Behind Marvel’s Decline

Analysts attribute Marvel’s downturn to three primary internal factors:

1. Unplanned Overproduction: Killing the Goose that Laid the Golden Eggs

To attract subscribers to Disney+, Marvel adopted an aggressive release schedule, producing four movies and four streaming series annually. The intricate overlap between the series and films required audiences to watch earlier projects to fully grasp the latest releases, effectively turning viewing into “homework.” This heavy burden alienated casual viewers, leading to a significant drop in audience engagement.

2. Overemphasis on Social Messaging at the Expense of Storytelling

In its creative process, Marvel increasingly prioritized embedding “social themes” before crafting its stories. Critics argue that this approach undermined character development and narrative appeal. For instance, Eternals garnered a low Rotten Tomatoes score of 47%, while the overtly didactic tone of She-Hulk alienated many viewers.

3. Declining VFX Quality Due to Conveyor Belt Production

Overburdened production schedules, budget cuts, and compressed timelines severely impacted the quality of Marvel’s visual effects (VFX). The unrealistic CGI in Ant-Man and the Wasp: Quantumania and the much-criticized opening VFX of Secret Invasion became laughingstocks upon release.

Victim of Corporate Power Struggles

Marvel’s decline is also tied to shifts in Disney’s internal power dynamics. Former CEO Bob Iger has publicly blamed the overproduction strategy on his predecessor, Bob Chapek. Marvel Studios president Kevin Feige, who once enjoyed significant autonomy, has seen his influence wane after consecutive box office failures. The recent layoffs, along with a restructuring that now requires Feige to report directly to Disney Entertainment’s chair, signal a reassertion of corporate oversight over Marvel’s operations.

A Gamble for the Future: Downsizing and Facing Existential Risks

In line with Iger’s directives, Marvel is currently scaling back its production, reducing its annual output to two or three films and two streaming series. The studio’s hopes for a comeback rest on major upcoming projects like Avengers: Doomsday and Secret Wars.

However, the disbanding of its core visual development team raises serious concerns about maintaining visual consistency in these complex projects. Marvel’s shift to an external contractor model aligns with a broader Hollywood trend of cutting creative costs through technology like AI, sparking debates about the long-term sustainability and quality of content production.