Disney Pays $60 Million to 66 Character.AI Staffers After Tech Layoffs
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Disney agreed to pay $60 million to 66 employees from an AI startup that filed for bankruptcy, weeks after tech layoffs
By James Faris
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Introduction
Disney has agreed to a substantial compensation package for 66 employees from an AI chatbot startup, Character.AI, which filed for bankruptcy. This move comes after Disney's own tech workforce reductions in September.
Disney's AI Strategy and Hiring
This hiring is part of Disney's broader AI strategy under CEO Josh D'Amaro, who has been investing in tech platforms to boost a stagnant stock performance. In mid-September, Disney hired Karandeep Anand, Character.AI's CEO, as its first-ever company-wide tech chief, although the exact compensation for Anand is not yet disclosed.
Recent Layoffs and New Hires
Disney's decision to bring in Character.AI staff followed its third major round of layoffs since D'Amaro took over in March. In late September, several hundred workers, including some tech employees, were let go.
Compensation and Retention Package
The compensation includes:
- $60 million per year for 66 workers over three years.
- An additional $30 million for an aggregate retention pool to encourage Character.AI employees to stay.
Disney estimates it will spend a total of $180 million on "total compensation and retention" for these employees over the next three years.
Character.AI Employees' Response
Of the 66 offered positions, 56 Character.AI employees have already resigned, while the remaining 10 are awaiting visa updates.
Legal Perspective
Entertainment lawyer Corey Martin of Granderson Des Rochers notes that the compensation figures are not unprecedented, given that Character.AI's employees are its most valuable asset.
"They're highly compensated employees. The numbers can be eye-popping, but it's not that unusual in this space," said Martin, who was not involved in the deal or with Disney.