LAKE BUENA VISTA, Fla. — The Walt Disney Co. announced Thursday that it was scrapping plans to build a new campus in central Florida and relocate 2,000 employees from Southern California to work in digital technology, finance and product development.

The decision follows a year of attacks from Gov. Ron DeSantis and the Legislature because the company opposed a state law that bans classroom lessons on sexual orientation and gender identity in early grades. Disney filed a First Amendment lawsuit against DeSantis and other officials last month.

Disney had planned to build the campus about 20 miles (30 kilometers) from the giant Walt Disney World theme park resort, but Josh D’Amaro, chairman of the parks, experiences and products division, said in a memo to employees that “new leadership and changing business conditions” prompted the company to abandon those plans.

“I remain optimistic about the direction of our Walt Disney World business,” D’Amaro said. “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.”

Political Tensions Affecting Disney’s Business Operations

Disney and DeSantis have been engaged in a tug-of-war for more than a year that has engulfed the GOP governor in criticism as he prepares to launch an expected presidential bid in the coming weeks.

DeSantis spokesman Jeremy Redfern said the state had been unsure whether the new Disney campus would come to fruition since it was announced nearly two years ago.

“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,” Redfern said.

Florida Sen. Joe Gruters, a former chairman of the state Republican Party, called Disney’s decision a huge loss.

“I hope we can put this conflict behind us and get back to a more normal working relationship with a company that’s been one of our best business and tourism partners that we’ve had over the last 50 years,” Gruters said. “Two thousand jobs and a billion dollars worth of investments into our state, I would say that’s a serious blow. The market is much better at dealing with companies rather than heavy-handed government.”

Democratic Rep. Anna Eskamani, who represents the Orlando area in the Florida House, released a statement blaming the governor for the lost jobs.

“Governor Ron DeSantis is a job killing moron who cares more about his own political ambitions and culture wars than Florida and our future,” Eskamani said. “According to him, ‘woke makes you go broke’ but this is another example of how it’s actually the complete opposite.

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Disney’s Legal Actions Against Desantis

The feud started after Disney, in the face of significant pressure, publicly opposed the state concerning lessons on sexual orientation and gender identity in early grades that critics called “Don’t Say Gay.”

As punishment, DeSantis took over Disney World’s self-governing district through legislation passed by lawmakers and appointed a new board of supervisors. Before the new board came in, the company signed agreements with the old board stripping the new supervisors of design and construction authority.

In response, the Republican-controlled Florida Legislature passed legislation allowing the DeSantis-appointed board to repeal those agreements and made the theme park resort’s monorail system subject to state inspection, when it previously had been done in-house.

Disney’s suit against DeSantis alleges the governor waged a “targeted campaign of government retaliation.” It asks a federal judge to void the takeover of the theme park district, as well as the DeSantis oversight board’s actions, on the grounds that they were violations of the company’s free speech rights.

The creation of Disney’s self-governing district by the Florida Legislature was instrumental in the company’s decision in the 1960s to build near Orlando. Disney told the state at the time that it planned to build a futuristic city that would include a transit system and urban planning innovations, so the company needed autonomy. The futuristic city never materialized, however, and instead morphed into a second theme park that opened in 1982.