Rainbow-colored Mickey Mouse cutout
A Walt Disney World photographer holds a Pride rainbow-colored Mickey Mouse cutout before the “Festival of Fantasy” parade at Walt Disney World in 2022. REUTERS/Octavio Jones

Walt Disney Co. is scrapping plans to relocate 2,000 jobs from California to Florida in part because of “changing business conditions” in the state, according to an e-mail to employees seen by Reuters on Thursday.

The announcement came amid a widening legal battle between Florida Governor Ron DeSantis and the entertainment giant.

Disney parks chief Josh D’Amaro said “leadership changes” and “changing business conditions” prompted Disney to reconsider its 2021 plan to relocate employees, including its Imagineers who design theme park rides, to a new campus in Lake Nona.

The original decision to relocate employees to Florida from California had prompted complaints from many employees who did not want to move across the country.

“Given the considerable changes that have occurred since the announcement of this project, including new leadership and changing business conditions, we have decided not to move forward with construction of the campus,” D’Amaro wrote. “This was not an easy decision to make, but I believe it is the right one.”

D’Amaro also noted the situation of employees who have already relocated. “For those who have already moved, we will talk to you individually about your situation, including the possibility of moving you back.”

Disney and DeSantis have been locked in an increasingly acrimonious battle that started in March 2022, when Disney’s then-CEO, Bob Chapek, criticized legislation in Florida that would limit the discussion of gender identity and sexuality in elementary schools. 

DeSantis, who is expected to soon announce that he will seek the 2024 Republican nomination for U.S. president, then moved to strip Disney of its long-standing self-governing power over Walt Disney World in Orlando. The governor argued that “woke Disney” should not receive special treatment in the state.

Disney called the move political retaliation over what should be protected free speech and sued the state last month to have the moves reversed.

A week ago, Disney CEO Bob Iger, in a call with investors about quarterly results, noted that the company employed more than 75,000 people in Florida, attracts millions of visitors each year to Disney World, and had plans to invest $17 billion to expand the resort over the next decade.

“So I’m going to finish … by asking one question,” Iger said on the call. “Does the state want us to invest more, employ more people and pay more taxes, or not?”

Iger’s predecessor announced plans in July 2021 to relocate jobs from Southern California to a new facility in central Florida, citing its “business-friendly climate.” While Disney has never disclosed the value of its investment, the Los Angeles Times reported that it would receive nearly $580 million in tax credits over the next 19 years.

“I remain optimistic about the direction of our Walt Disney World business,” D’Amaro wrote. We have plans to invest $17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so.”