Tech & AI
Disney hires Character.AI staff as the startup's parent seeks bankruptcy protection
Disney plans to pay for talent from Character.AI, whose parent company has sought bankruptcy protection. The step follows the entertainment group's own job cuts.
Quick Read
- A Chapter 11 filing by Character.AI's parent shows Disney plans to pay for the startup's talent each year.
- The hiring comes soon after Disney cut jobs, including some technology roles, according to reports.
- Disney shares edged down 0.1% on Friday, while Alphabet shares slid during a broad decline in technology stocks.
What did Disney agree to?
Disney plans to hire employees from Character.AI, an artificial intelligence startup, according to a pay plan disclosed in court papers.
Why it matters: The plan surfaced in a Chapter 11 filing by the startup's parent company. Chapter 11 is a type of bankruptcy that lets a business keep operating while a court supervises a restructuring or sale.
Reports describe the arrangement as a yearly spending commitment by Disney on the startup's staff.
Why does the timing stand out?
The hiring follows a recent round of job cuts at Disney. Those cuts reached some of the company's own technology workers, according to reports.
The plan shows a large employer trimming staff in some areas while paying for outside AI expertise in others. Public details so far do not show how the incoming staff will fit with Disney's existing teams.
How did the shares move?
Disney shares edged down 0.1% on Friday, Oct. 16, closing at $110.59. That left the stock 5.2% below its 52-week high of $116.65.
Alphabet's (Nasdaq: GOOGL) Class A shares slid 2.5% and its Class C shares slid 2.3%. Technology stocks fell broadly that day, and the Nasdaq-100 slid 2.5%.
What comes next?
What’s next: The parent company's bankruptcy case now moves forward under court supervision. Alphabet is scheduled to report quarterly results on Oct. 28.
The government's October jobs report, due Nov. 6, may give a broader view of how hiring and layoffs are balancing across the economy.
For readers
What it could mean for you: Workers in technology and media are the people this story reaches most directly. Disney is cutting some roles and paying to bring in AI specialists from a struggling startup. If other companies follow a similar pattern, demand could tilt toward people with AI skills. Some other technology jobs may face more pressure. That could shape who receives offers and who has room to ask for a raise. The October jobs report on Nov. 6 might offer a wider read on hiring and pay.
Questions and answers
What did the Character.AI bankruptcy filing reveal about Disney?
It disclosed a pay plan under which Disney plans to spend each year on talent from the startup. The plan came to light soon after Disney cut its own workforce, including some technology staff.
What is Chapter 11 bankruptcy?
Chapter 11 is a form of bankruptcy that lets a company keep operating while a court oversees a restructuring or a sale of its assets.
How did Disney stock react?
Disney shares edged down 0.1% on Friday, Oct. 16, to close at $110.59. That was a small move on a day when technology stocks fell broadly.
The numbers
| Alphabet (GOOGL) price | $340.59 |
|---|---|
| Alphabet (GOOGL) change | −2.47% |
| Alphabet (GOOGL) 52-week high | $402.62 |
| Alphabet (GOOG) price | $336.91 |
| Alphabet (GOOG) change | −2.32% |
| Alphabet (GOOG) 52-week high | $399.04 |
| Walt Disney (DIS) price | $110.59 |
| Walt Disney (DIS) change | −0.08% |
| Walt Disney (DIS) 52-week high | $116.65 |
| S&P 500 change | −1.09% |
| 10-year Treasury yield | 5.09% |
Friday’s close
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