2,000 Disney employees are no longer moving to Florida, as the company is canceling plans to build a nearly $1 billion office complex in the Lake Nona development in Orlando. 

The planned move, which included the Walt Disney Imagineering division, had first been announced in July 2021 under then-CEO Bob Chapek. Employees had asked for the company to call off the move in 2022 over Florida’s so-called “Don’t Say Gay” law, which forbids “classroom discussion about sexual orientation or gender identity” in public schools from kindergarten through third grade (and has since been expanded to cover all grades). 

The move was later delayed to 2026 and when Bob Iger returned as CEO last November, he said he hadn’t made any decision about the Lake Nona plan. But the cancellation comes just after Iger made an implicit threat towards the state regarding its ongoing political battle with Republican Florida Gov. Ron DeSantis. 

“Does the state want us to invest more, employ more people and pay more taxes or not?,” Iger said on Disney’s most recent earnings call. 

In a Thursday memo announcing the change, Disney’s chairman of Parks, Experiences, and Products, Josh D’Amaro, said, “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.” 

The New York Times reported that, based on anonymous sources, the ongoing battle with DeSantis over the state takeover of Disney World’s governmental district “figured prominently into Disney’s decision.”

Orange County, Florida Mayor Jerry Demings, a Democrat, said in a statement: “It is unfortunate that Disney will not be moving forward with construction of the Lake Nona campus. However, these are the consequences when there isn’t an inclusive and collaborative work environment between the state of Florida and the business community.  We will continue to work closely with our valued partners at Disney.”

An unnamed spokesperson for Gov. DeSantis dismissed the cancellation in a statement to multiple media outlets, saying, “Nothing ever came of the project, and the state was unsure whether it would come to fruition. Given the company’s financial straits, falling market cap and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures.”

Disney’s stock price has indeed fallen by 9 percent in the past 12 months. The company has also initiated an effort to cut $5.5 billion in costs, including laying off 7,000 employees.