Hollywood is prepping for its biggest night of the year at the Oscars on Sunday, but chaos at Disney is already looming large over the event – with internal discord and an escalating employee backlash at the Mouse House threatening to spoil the party.

Disney is scrambling to contain the fallout over its response to a Florida bill that would bar teachers from discussing LGBTQ topics like sexual orientation or gender identity with students unless they’re in the fourth grade or higher.

The issue prompted an internal battle among company employees who are divided on whether Disney should get political.

Left-leaning employees staged walkouts this week, arguing the company failed the LGBT community by initially failing to denounce the bill.

A separate group of conservative employees urged the company to stay “politically neutral” – arguing Disney has created an “environment of fear” for workers who don’t adhere to “progressive orthodoxy.”

The battle over Disney’s political leanings reaches as high as the C-suite, with current CEO Bob Chapek reportedly preferring to stay out of partisan debates – and chafing at interference from his progressive-minded predecessor, supposedly retired executive chairman Bob Iger.

The heated situation could overshadow the Oscars broadcast for ABC-owned Disney – with studios such as Marvel and Pixar and prominent celebrities such as actor Oscar Isaac and HBO host John Oliver among those who have pressured the corporation to take a stand.

Disney attempted to stay out of the public debate over Florida’s law, which detractors have dubbed the “Don’t Say Gay” bill.

But the situation intensified on Feb. 24, when Iger tweeted that he agreed with President Biden’s stance that it was a “hateful bill” – even as Chapek-led Disney declined to take a public stance. Chapek reportedly felt undermined by his predecessor.

After days of mounting pressure from LGBTQ rights groups, Chapek broke his silence in the bill in an internal memo on March 7. He reiterated Disney’s “unwavering commitment to the LGBTQ+ community,” but asserted that “corporate statements do very little to change outcomes or minds” and often divide the public further.

Chapek’s initial memo infuriated many Disney employees. A group identifying itself as “LGBTQIA+ employees of Pixar and their allies” said the CEO’s words “rang hollow” and accused Disney executives of actively censorship.

“Nearly every moment of overtly gay affection is cut at Disney’s behest, regardless of when there is protest from both the creative teams and executive leadership at Pixar,” the employees said.

Within days, Chapek apologized for failing to be a “stronger ally” – adding that Disney would pause all political donations in Florida and donate donate $5 million to LGBTQ rights groups, including the Human Rights Campaign.

Disney restored a same-sex kiss scene to Pixar’s upcoming feature film “Lightyear” – a reversal that came after the damning letter from Pixar employees. The company also held a “town hall”-style forum on Monday in a bid to ease tensions among its workforce.

The measures appeared to have little effect – with some Disney employees reportedly going over Chapek’s head and complaining to Iger about how the company has responded to the Florida bill, CNBC reported.

Despite Disney’s efforts, employees still staged walkouts last Tuesday – with the protests’ organizers declaring the company had placed them in “an impossible and unsustainable position” that required drastic action to achieve change.

Meanwhile, Disney’s increasing involvement drew criticism from a separate faction of employees who argued Chapek had the “right idea” by initially staying quiet. Disney has yet to publicly address that group’s concerns.

“We frequently see those who share our opinions condemned as villains by our own leadership,” the workers added. “This politicization of our corporate culture is damaging morale and causing many of us to feel our days with TWDC might be numbered.”

The happiest place on earth could face additional barbs during the Academy Awards broadcast itself, with the show serving as a potential platform for Hollywood progressives looking to browbeat Disney from the stage.