Disney pays $60M a year for 66 Character.AI employees while cutting staff: AI talent is bought, everyone else is trimmed

By WDW News Today · October 17, 2026.

Disney would pay $60 million a year to 66 employees coming from Character.AI, the now-bankrupt chatbot startup. The figure is reported by WDW News Today, citing Business Insider. It comes weeks after Disney cut hundreds of jobs, including some in technology.

The figures, according to those sources: the bankruptcy filings also reveal a $30 million retention pool to keep those employees from leaving. Total spending on compensation and retention would come to around $180 million over three years. For scale: $60 million across 66 people works out to about $900,000 per person per year, although the source does not specify exactly what that figure includes.

The context is complicated. In September 2025, Disney sent Character.AI a cease-and-desist letter over the unauthorized use of its characters in user-created chatbots, and over inappropriate interactions with them. Character.AI later said it had removed the flagged characters. Disney has now submitted a $20 million bid in the bankruptcy proceedings: a non-exclusive license to specific intellectual property, excluding the app, the brand, user data and conversations.

The move is rounded out by the appointment of Karandeep Anand, former CEO of Character.AI, as the company's first enterprise-wide chief technology officer (CTO). It was announced in September and took effect on October 2. Anand reports directly to CEO Josh D'Amaro and oversees corporate technology, infrastructure, data and AI platforms, product and engineering. Also in September, chief legal officer Horacio Gutierrez warned that the Legal and Global Affairs division would be smaller.

**Our take.** The thesis: this is the AI labor market in miniature. It is not simply "AI takes jobs," but an uneven distribution. A company cuts hundreds of positions while paying elite sums for a small team that knows how to build, train and deploy models. Scarce talent gets more expensive; administrative and routine work shrinks. This is consistent with our view on employment: what changes is which work matters, more than whether there is work.

The deal is also a way of buying capability without buying the product. Disney keeps the people and a limited license, and leaves out the app, brand and user data. It is a prudent play for a company that, a year ago, was confronting that same startup over the use of its characters. The winners are the hired team and Disney, which brings know-how in-house. The losers are the laid-off employees, who won't see that money, and the startup's investors. One caveat: we don't know the exact reasons behind each cut, nor is it claimed that the layoffs and the hires are causally linked.

Overall, the short-term transition is harsh and asymmetric: elite salaries coexist with mass layoffs, and that fuels inequality. In the long run, the underlying bet remains that the technology Disney wants to master will free people from repetitive tasks and expand creativity. But that promise will only be fulfilled if the transition doesn't offload its costs onto those who aren't at the $900,000 table.